College Students Can Learn to Handle Money
You are leaving for college soon, which is an exciting time in the life of any high school senior. Everything is packed, and you can hardly wait to move into the dorm or your first apartment. You're going to have the time of your life. All this is absolutely true. However, if you want all that fun to last, you have to spend a little time now and then to figure out how to make your money last as long as possible, and how to stay out of financial trouble. Nothing can ruin a good time like running out of money, bouncing checks and having your credit cards declined!
Financial Literacy for College Students
Over the next few years, you will move from being totally dependent on your parents to becoming a responsible adult who is capable of paying all your own bills yourself. College is the perfect time to learn how to make that transition. First, assess how much income you are going to have each month. It doesn't matter if it is money that your parents are giving you, or money from a part-time job, you need to know exactly how much income you have. Second, make a budget. You start by listing all the expenses you have to cover out of your income … rent, food, gas for the car, insurance, books, school supplies. Next, put a little aside in a savings account, for unexpected bills. This will prevent you from having to call home all the time for every little "emergency." Finally, whatever you have left over you can spend on entertainment and fun. This is how adults handle their money in the real world. If you start out in college handling your income the same way, you will impress your parents and gain their respect. Avoid using credit cards. You have to pay them back, and the payments can quickly eat up all that "extra money" you thought you would be able to use for fun. Limit yourself to spending what you have!
By the time you graduate from college, you will want to prepared to living a fully independent life. One of the best guides to help you with your future financial success is Suze Orman's "The Money Book for the Young, Fabulous and Broke." This book will help you decide how to participate in a 401(k) at your first job, how to handle your credit and student loans, how to finance and buy your first car and home, setting up a savings plan for retirement, and more. You don't need to read the book all the way through. Just read the appropriate chapter as the situation arises.
Financial Help for College Students
If your family is not able to pay for your college costs without financial aid, you should talk to the financial aid office at your college as soon as possible. Let them know as soon as you receive that letter of acceptance that you want to apply for aid. They will have a variety of programs to help you. Just remember that financial help is available for the vast majority of college kids and it may be a combination of grants based on need, scholarships based on your academic background, and student loans. You will learn more about these programs below.
College Financial Aid Advice
College financial aid comes in many forms. You may be eligible for a scholarship, based on your high school grades or SAT scores. There are even colleges, such as the University of Oklahoma, that will give full scholarships to many National Merit Finalists. Other colleges will give partial scholarships to attract these top students. In addition, colleges often offer financial grants to students, based on their financial need. The income requirements may be more generous than you think, so don't be afraid to apply. In addition, many colleges may provide some of their students with part-time jobs. Or, students may find their own part-time jobs in shops and cafes near their chosen college. The extra money can certainly come in handy as a way to pay for books, incidentals and fun!
Government Financial Aid for College Students
Once you have assessed what your family can pay, the amount of scholarship or grant money you will be awarded, and how much you can earn from part-time work, you may still not have enough money to cover all your tuition, living expenses, and college spending money. In this case, you will want to apply for government financial aid. Both you and your parents can take out loans through these programs and, in most situations, you will not be required to repay the loans until after you graduate. Your financial aid office at your college will help you obtain the proper paperwork for SallieMae, Navience, and other lenders.
Financial Planning for College Students
As you near the end of your college career, don't forget that you will have student loans to repay. Despite my warning, many college students will also graduate with several thousand dollars in credit card debt. You will need to take this into consideration as you approach graduation and look at your career options. If you are graduating with debt, this may not be the best time to go backpacking around Europe!
However, if you have been financially responsible about handling your own bills throughout college, you will be well prepared for your future as a new college graduate.
Financial Advice for College Graduates
As mentioned before, well-know financial planner Susie Orman has written a book which is available from Amazon at this link: "The Money Book for the Young, Fabulous & Broke," is an excellent guide for new college graduates. It has chapters that cover everything from buying a car to buying a house, and includes information on budgeting and planning for your future. It also discusses retirement planning (you're not too young to think about it), dealing with student loan debt, and when to use credit cards. I highly recommend this book to any new college graduate as a way to get their financial future in order.
Good luck on your college career. With a little financial planning, you will have a wonderful time!
If you are interested in more tips for college students (and others), you may also want to read:
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Every College Student and New Graduate Needs this Book
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