You’ve spotted plenty of articles offering advice to young students going to college for the first time this fall. You’ve read about advice regarding how to study hard, how to make new friends and how to manage homesickness while moving far away — but have you read about how to manage your finances?
These are some simple financial tips that you’ll want to follow this year.
Use a 529 Plan for More Than Tuition
Your family started a 529 education savings plan in your name years ago. Now that you’re finally old enough to go to college, you can tap into those savings and use them to fund your education. Did you know that you can use those savings for more than your tuition? That’s right — there are plenty of other education-related expenses that you are allowed to use the money for. These are just some of the other expenses:
- Room and board
- Essential electronics
- Essential computer software
- Internet service
- Textbooks
- Student loans(although there are maximums for this expense)
So, if your family managed to put away a big pool of savings for you, don’t let it collect dust after covering your tuition fees. You can use the savings for other needs this year.
Apply for a Student Credit Card
It’s the right time to start building up your credit experience. If you don’t have a credit card yet, you should consider applying for your very first one this year. A credit card is extremely useful for handling certain types of expenses, like new electronics and online shopping purchases. And, of course, you can use a credit card as a backup plan when your emergency savings are running low.
Now, applying for a credit card when you’re a college student is difficult to do. The CARD Act prevents credit card issuers from offering accounts to young adults under the age of 21. Even if you apply for a card, your age could prevent the issuer from approving your application. This doesn’t mean that accessing a credit card is impossible before you’re 21 years old. You may still be able to gain access to a credit card when you have a cosigner! So, ask your parents/guardians if they are willing to become your cosigners.
What Type of Credit Card?
There are credit cards that are specifically designed for college students who are new to using credit. These cards typically come with low fees and minimal requirements for applicants. They also tend to come with rewards that make student life easier, like cash back for transactions made at restaurants and gas stations. And some will offer rewards for using the card to book plane tickets, hotel stays and car rentals — this can be extremely helpful for those visits back home.
So, if you’re going to apply for your very first credit card this year, make sure that it’s a student credit card. Take advantage of the special benefits that this type of card has to offer before you graduate!
Build an Emergency Fund
Is your savings account practically empty? You should do your best to change that. You’ll want to fill up your savings account and turn it into a reliable emergency fund.
An emergency fund can help you handle any surprise expense that threatens to throw a wrench into your finances. For instance, you get a serious toothache, and you need to book an urgent dentist appointment to treat it. You’ll be able to pay the bill once the dentist finishes working on your teeth.
All you have to do is withdraw the necessary savings from your fund and then pay off the expense as soon as possible. You don’t have to panic at all. And you certainly don’t have to call your parents back home and beg them to send you some money. You’ll be able to solve the problem all on your own.
If your emergency fund is low (or worse, non-existent), and you need to cover an urgent expense, you can still resolve the problem on your own. You could charge the expense to your credit card and pay down the balance later. Or you could go to a website like CreditFresh and try to apply for an online personal loan. With an approved online loan, you could borrow enough funds to handle your emergency expense in a short amount of time. And then, like the credit card, you could repay what you borrowed through a steady billing cycle.
You should know that online loans have strict application requirements. You will need to be of legal age of contract in your state and you will have to have a consistent stream of income in order to apply. Without these qualities, you won’t be eligible to apply.
After following these financial tips, you can direct all of your attention to your studies. You don’t have to worry about your money so much.
