A college education is expensive enough without the many financial pitfalls waiting for the unwary student. From increasing tuition rates to an occasional night out, a four-year degree can turn into years of payments.
However, following these tips can go a long way towards minimizing your expenses:
Reserve Credit Cards for True Emergencies
While it can be handy to have a credit card during a crisis, the casual use of credit translates into deep debt for many students. If you succumb to the temptation of easy credit while you’re still in school, place the card in a secure area where you’ll have to think twice before swiping. Otherwise, carrying it around in your pocket could mean dollar beer night at the local hot spot becomes a weekly emergency.
Use a Prepaid Card
Everyone recognizes cash is somewhat passe in the modern world, but this doesn’t mean you have to use a credit card. Although most banks can provide a debit card with any account, it can be a pain to deposit those paper checks your parents send or wait for a bank transfer when you’re searching for loose change. With a pre-paid credit card, you can have the best of both worlds. Use it like a credit card, and you or your parents can easily recharge it from any bank account.
Pay Your Bill in Full
If you do have an emergency that warrants the use of a credit card, pay the balance in full before the grace period ends to avoid finance charges and protect your credit rating. When applying for the card, take the time to read the agreement in full. Some cards have restrictions on purchases that could eliminate the grace period. This means the company may start charging interest as soon as the charge is applied to your account.
Shop Around for the Best Bank
All banks are not equal when it comes to account fees. Frequently, students can get a better deal for their specific needs at a smaller bank. If you use your debit card frequently, look for an account without limits and low fees for ATM withdrawals. Choosing a bank with convenient locations can also reduce the amount of fees paid when using foreign ATM machines. Above all else, college students should look for banks without minimum balance requirements and low overdraft fees.
Limit Your Spending
You’ll never have control of your finances if you can’t limit your spending. To start, track every penny you spend for 30 days. Next, categorize each purchase and create a realistic budget. If you’re shocked by how much you spend on lattes or nights out, cut back on those areas. As you reduce your expenses, add to your savings account so that you can fall back on your nest egg instead of a credit card when necessary.
By spending wisely, you can earn a college degree without unnecessary debt and develop financial responsibility. What was your favorite way to save a buck while you were in school?