More Money, More Problems? A Student’s Guide to Basic Money Management

By Amelia Woolard

As a savvy college student, you already know the basics of cutting financial corners – like buying used textbooks, preparing your own meals, and living off-campus in a more affordable apartment. But, what about those other need-to-know financial habits that will successfully carry you through your early 20s and beyond? You know, like paying bills on time, managing rent payments, and budgeting for things, such as food, gas, and emergency expenses?

Even if you’re no stranger to balancing a checkbook or pitching in for household necessities, it’s likely that you’ve still got a way to go before you consider yourself financially savvy.  And, you definitely shouldn’t put off gaining these pivotal skills until you’ve got that sought-after college diploma in-hand. In fact, the sooner you come to understand the sometimes-confusing world of money and personal finances, the better – because failing to do so could result in critical missteps that might carry long-term consequences.

That’s why your friends at uCribs have dedicated this blog to a few basic financial management tips, from developing your first-ever personal budget to rethinking your student loans and credit cards. As they say, time is money… so, let’s get to it!

Develop a financial budget.

We know, we know…budgeting is just about the least fun skill you can think to master while in college. But, no matter how enjoyable spontaneous spending is, budgeting is crucial if you hope to set your future self up for financial success and ensure that you’re making wise choices with the limited funds you have presently. Not only does budgeting help to confirm your current resources, but it also helps you see exactly where your money is going – and, if you ask us, that insight alone is often worth the effort it takes to keep up with your finances.

Fortunately for you, budgeting in the 21^st century is simple, thanks to smartphone apps dedicated to the task. While most budgeting apps cover the general bases – like syncing with your online banking accounts, categorizing your spending, and monitoring your credit score – there are a few differences between 2020’s most popular options. Clarity, for example, allows you to save cash by applying lesser-known discounts to services you pay for monthly, or cancelling subscriptions you don’t use. Mint is great for building a budget that you can stick to and continually updating you on your progress. And, PocketGuard will help you out if you ever find yourself wondering how much money you can spend at any given moment. See? Budgeting can be super easy when you’ve got the right app to assist you along the way!

Borrow from loan providers wisely.

Too often, loan disbursements feel like free money designed to help you live your best life in college. Unfortunately, though, that couldn’t be further from the truth. While it might feel great to take out an extra 5,000-dollars to cover daily expenses – and all the charges you tend to rack up on the weekends – you’ll be kicking yourself later, once that initial sum of money has accumulated interest over four years. We’re not talking about “normal” interest rates either; student loans carry with them interest rates that average between five and seven-percent. And, that’s assuming that you don’t decide to graduate late, pursue a master’s program, or defer your loan payments while you’re searching for your first “real” job. Choose any of these common post-grad paths, and you’ll be responsible for paying back even more in interest fees. Yikes!

So, do your best to avoid the “sticker shock” of your combined student loan totals by making smart decisions when it comes to taking them out in the first place. Only request as much financial aid as necessary to get you through your program, and if needed, look for other ways to supplement loan money. This could entail applying for new scholarships or grants, or assuming a paid internship or part-time job while you’re enrolled in school. Sure, juggling a job and coursework might not be the way you intended to spend your college years, but your future self will certainly thank you once you’ve graduated college with less debt than your peers!

Get a credit card – but be careful with how you use it.

Credit is essential to your future as a financially stable adult. Your credit score is calculated based on the number and types of accounts you have, length of credit history, your payment history, and used credit versus available credit – and you can bet it will come in handy when you’re ready to rent an off-campus apartment, buy a new car, or make another major purchase without having to turn to a parent or  family member for help. Since the length of your credit history is factored into your all-important score, it’s important that you begin displaying trustworthy financial habits as early as possible– and the best way to do so is by signing up for a credit card. However, once it’s activated, it’s crucial that you vow to use it responsibly.

Getting your very own credit card can feel like receiving the keys to a vault of free money – but, like student loans, this is not the case. While you might be tempted to max out your brand-new line of credit with new clothes, fancy dinners, and fun nights out with friends, don’t get it twisted: credit cards can quickly put you in more debt than you can imagine if you neglect to pay off your monthly balances. Our advice? Use credit cards only when necessary and be sure to pay them off as quickly as possible, so you have no remaining balance. Doing so will signal to credit bureaus that you can act responsibly with your money. In turn, you’ll enjoy an increased credit score, a higher line of available credit, and even more options as to whom you can bank with.

Protect your financial assets from theft and fraud.

Right now, you’re probably thinking: “Financial assets? What financial assets?” After all, you’re pretty sure that the only assets to your name are one lone debit card and 60 bucks in cash…but, bear with us here. One day, those empty bank accounts will swell to accommodate biweekly paychecks, cash picked up from your side hustle, a growing rainy day fund, and maybe even a 401K. When all of this goes down, you must make sure that you’re prioritizing the security of your money, along with all of the sensitive information your bank accounts contain. Sounds like a no-brainer, right? Well, you’d be surprised at how lax some people are with their financial info in the Digital Age – Gen-Z included.

Luckily, protecting yourself from identity theft and fraud is easy, as long as you remember a few key pointers. Don’t share your banking information with anyone – even close friends. If you like to keep cash on-hand, store it safely, and don’t tell others where to find it. We also suggest that you don’t keep too much on-hand at once. Finally, you should regularly check in on your accounts to ensure that no suspicious activity has taken place and take extra precaution with passwords on public or shared devices. Just remember, you can never be too careful when it comes to protecting your personal information!

Maintain a savings account – even if it’s small.

Of all the habits necessary to your future as a financially stable adult, few are as vital, or as challenging, to put into motion as starting a savings account. Even though it’s difficult, most of us at least understand the importance of saving money – after all, a rainy-day fund is the best line of defense against unforeseen circumstances, like a sudden job loss or health emergency. But, when it comes down to it, we’d much rather exchange our cash for a new pair of shoes or a weekend getaway than stow it in a savings account.  So, it’s no wonder that more than 1 in 5 working Americans aren’t saving any money whatsoever.

Many young people believe that saving money is for older adults or those who are already established in their careers. While 30 and 40-somethings might have more income to funnel into their respective savings accounts, college students can get started early – even if they don’t yet have much to put towards the account.  The entire point is to kickstart a lifelong habit of saving money, so that when you do bring home those big checks, you will have already conditioned yourself to put away a small slice of the pie for a later date. Why not start with 10 or 20 dollars from each part-time paycheck, and see how far you can get? Hey, there’s literally zero downside to saving money— even if it’s a small amount, there are countless benefits to be enjoyed, like your peace-of-mind, for example.

Aside from the skills necessary for graduation in your field of choice, arguably one of the most crucial life lessons you’ll pick up while pursuing your Bachelor’s degree is a basic understanding of money management. There’s no doubt—it will be overwhelming at first. But, your pals at uCribs promise that it’s like riding a bike – once you learn how to get a grip on your finances, you’ll likely never forget. With our advice, you can bet that 2020 will be your most financially cents-ible year yet!

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