Personal Finance for College Students: The Total Guide

Financial planning is very important for college students and financial decisions we make in college will reverberate throughout our life for years. Smart students turn the financial pain to their advantage by learning money habits and a student needs to spend wisely even after getting their dream job. College life is the perfect time to take control of personal finances and college students will reap the rewards of today’s financial decisions years from now. If we start saving $100 a month at age 18, we will have $4800 in four years. An employee based in the United States of America will be eligible for fair pay, overtime pay, benefits and employer paid taxes. They will receive extra perks beyond their pay and Starbucks offers health coverage, retirement benefits, and tuition assistance to employees who put in 20 hours a week.

It is quite important to spend less than we earn and save for the future as an employee. Mini action plan for employees include opening a checking account, opting out of overdraft protection, tracking spending, paying bills on time by enrolling in auto pay, and defining financial needs vs wants. Many banks and credit unions in USA provide no fee checking account to college students. $35 is the typical bank overdraft fees and it is to be ensured that our debit card declines purchase if we lack sufficient funds in order to avoid overdraft fees. It is a good idea to setup a budget spreadsheet in Microsoft Excel or on Mint.com and record what we have spent every night in that Microsoft Excel or Mint.com.

Automating Credit Card Payments

We can reduce the risk of incurring late fees by automating credit card payments and other monthly bills. Food, clothing and shelter come under the umbrella of financial needs and most other things are wants. A credit card will be an excellent tool for making purchases conveniently and for building credit score when we have steady income. Credit card will become a hazard if not managed properly and it often paves the way towards debt trap. According to personal finance experts, a great goal for a student is to leave college without credit card debt.

Interest rates on credit cards for college students is 24 percent and it is higher than the interest rates on student loans. A college student can use cash for big purchases and it is important to think whether a college going student really needs a credit card. Credit card without annual fee and low interest rates are recommended for college students of today. Soaring college costs make saving unrealistic for most college students and it is important to save a little each month. Some personal finance tips for college students include creating a budget, tracking spending, building an emergency fund, taking advantage of college’s resources and skipping full price textbooks. College going students should slash their spending and stash away the savings.

The Importance of Student Loans

Student loans make perfect sense and college students can look for scholarships, grants, and work study programs. Federal loans come with lower interest rates and more generous forgiveness provisions. Health insurance coverage is an absolute must for college going students and many colleges offer student health plans. The premiums of student health plans are  affordable and financial discipline, financial independence, prudent borrowing, and long term planning are the lessons we learn while in college. Learning to spend wisely instead of impulsively is a skill that can be mastered and learning financial responsibility is a vital part of growing up.