College should be a time to expand you mind: socially, academically, and professionally. Too often, however, lack of life experience catches up with us in our college years. Particularly in a time of skyrocketing education costs, and lower parental support through college, you've got to be careful in your first years on your own. With a little thought, keeping your finances in good standing isn't hard — it just takes some practice and the right tools.
Because just a little help can go a long way in learning to manage your finances, and the younger you start the process, the better. We've been on the lookout for the best financial tools out there. And don't worry, it's easier than the old days; there's an app for that.
10.Peer-to-Peer Payment System
This happens all the time in college. You're out late, or early, or at some random place that only accepts cash. Midnight gyros start to add up. Make sure your friends repay you with peer-to-peer payment systems. While there are a number of ways to do this, Venmo is one of the only free options, and options like Dwolla charge small fees per transaction. Paypal is free with bank accounts, and Share-A-Bill is free for iPhone after you buy the app for $3.99. Regardless of what you choose, tell your friends about them in case someone doesn't have cash, or even if you just have to split a bill.
P2P payments are taking off everywhere, and with options like Square,WePay, and GoPayment are even good options for starting your own small businesses. Last year over $1 trillion was paid on P2P systems. They're accepted by all types of people, and a great way to take care of your finances.
With everything else on your mind, it can be hard to keep track of how much per day, week, or month you can spend. Budgeting used to involve tracking expenditures, saving receipts, and prioritizing. These days you can link your accounts, enter priorities periodically, and just check the app when making purchases. Many budgeting apps tell you how much you have saved towards certain goals, and how much you can spend on any given day. Other helpful tools include text notification when you go over your planned amount, and the ability to see trends in spending over time.
The oldest and one of the most popular options is Mint an app that breaks down spending into easy to follow categories, and downloads balances from your bank accounts, credit cards and investments. Other options include Check,Manilla which focuses more on bills, and Moneydance which also works on OS X.
8. Find the Right Bank
Banks make big bucks on students new to taking care of their own finances. Especially when you don't have many funds in your account, it's important to learn about the fees your bank might charge. Try to avoid banking arrangements that charge monthly maintenance, ATM, or inordinate overdraft fees. As many students move away, you also want to make sure your bank is accessible (at home and school, preferable). Online banking tools are also a good way to manage your finances, and are only provided by some banks. As ranked by USnews, Bank of America is the best bank for students, though there are a variety of options depending on your location and specific needs.
7. Check Out Student Loan Counseling, Even If Just Once!
Many students make the mistake of never thinking about their student loans until they're out of school. Surprise! Many of your loans were accumulating interest while you studied. And the first month's payment is usually due even if you do end up changing repayment plans. There are tons of ways to manage student loans, from paying off only interest at first, to changing the number of years in which the loan is due, to taking on interest payments while you're still in school so the loan's principal doesn't grow. You can take advantage of these options early, and if you need to, it's always easy to change options farther down the road.
Some tips: if your parents have been handling your loans for you, get involved! Your loans will probably be around for a while, so it's better to know now what's going on and start planning. Also, don't be worried.
There are a number of options when it comes to dealing with student loans, and almost everyone has them. The annual contribution to college costs from parents is down to 27% (from a high of 36% 4 years ago), and unless you get a sweet deal on financial aid, you'll probably have to borrow. There are a number of student loan counseling options, with the Financial Awareness Counseling Tool by the Department of Education as a tried and true tool. Generally, customer service representatives from the companies holding your loans are helpful as well. Check it out!
6. Buy Stuff Cheap
If you're in college, this is why you can't have nice things. Well, you can have nice things, but just don't spend a lot of them. Chances are the new furniture at the frat house won't last long, and with the current cost of just attending school, you probably should be happy to save some money where you can. Good thing college towns are filled with young folks, buying, selling, and getting rid of their stuff. Check out vintage clothing stores, sales of old furniture by your University's departments, and craigslist. Check out platforms like BigWords for buying textbooks (and selling them back when you're done). Also, use digital textbooks or just rent them where possible. Many college towns are also filled with student discounts. Even if the discount isn't listed, just ask and you'll often be surprised.
5. Credit Cards
In college, credit cards can be stepping stones to early established credit, or sources of long-standing trouble. Creditors know they can profit on unwitting and inexperienced students, and heavily target them with credit card offers. While there are some legitimate student credit cards, there are also high interest credit cards that target those with new credit, and cash lines with even higher interest rates. Ask friends and family members if they have any suggestions for cards that have worked for them. Look for cards without extra fees, such as annual fees, and a grace period for finance charges. Look for cards with additional perks such as cash back, frequent flier miles, or discounts on items you purchase regularly.
Once you have a credit card, try and pay it off fully whenever you can. If you must keep a balance on the card, utilizing less than 30% of your total available credit minimizes the impact on your credit. 35% of your credit score is based on your payment history, and 30% is based on loan and credit card debt, so taking care of your credit card is a good portion of at least 65% of your credit score.
4. Know the Difference Between Soft and Hard Credit Checks
Something that many college students don't know is that there are two types of credit checks, and that it's important to regulate which type you're receiving.
Hard credit checks occur when applying for auto, student, business, and personal loans. They also occur with mortgages, and sometimes when applying for credit cards, opening a checking or savings account, and starting TV, internet, and cell phone contracts.
Hard credit checks lower your credit score by several points and remain on your credit report for 2 years so as to discourage consumers from applying for too much credit at once.
Soft credit checks occur when you check your own credit, when you receive pre-approved credit offers, and at times when applying to rent an apartment, verify your identity, and when starting a TV, internet, or bank account. Due to many applications being either hard or soft credit checks (depending the entity whose checking's preference), it's always best to ask if a credit check will be hard or soft. If you don't have great credit, or don't have credit period, try to avoid hard credit checks when possible, and always try to avoid multiple hard credit checks in a row.
If you're curious as to what your credit report looks like, and would like to perform a soft credit check on yourself, try services like Credit Karma. After receiving a credit report that you think is mistaken, services to dispute your credit report are also available online. Regardless, it's good to keep track of your credit even if you aren't making many big financial moves while in school.
3. Find an Internship
If you're currently a college student, this one's for financial advice for the present and future. With a little bit of looking, you can probably find an internship that's paid (directly helping your finances), and when you're just starting out, really any work experience is good (at helping you get a job in the future).
Good internship opportunities are built around teaching the intern, and often include the teaching of specific skills the intern wants to learn. Ask to help out with an accounting project, or just ask some questions to those around you. There's no one way to learn from an internship you're taking part in.
If you don't know where to start your internship search, head to your school's career services office. If you want to search online, check out sites like Internships.com, Experience.com, InternMatch.com, or Mediabistro.com. Or just ask someone you know who works in a field you're interested in. There are tons of places that could use an extra pair of hands even if they haven't previously had a lot of interns.
2. Apply for External Scholarships
Most students apply for financial aid for college, and a good number apply for scholarships through parents workplaces, or through organizations in the community. Few students, however, take full advantage of the number of scholarships that are available online. When you're writing personal statements, and filling out a lot of forms with the college application process anyway, why not repurpose some of your work to see if you qualify for more money?
If you're literary, there are tons of yearly scholarships based on writing a response essay to a book. For artsy kids, a number of scholarships hold contests for everything from haiku's, to Youtube videos, to paintings. If you're just plain smart, there are tons of achievement-based scholarships. Two of the largest databases of scholarships are at scholarships.com and zinch.com. These are hardly exhaustive, but as scholarships.com notes, you probably qualify for at least dozens (if not hundreds) of scholarships.
1.Have an On-Campus Job
While you can always just hold down a normal part-time job through college (which isn't a bad idea), on-campus jobs and work studies are often a bit better suited for students. From student post office workers, to writing tutors, to attendants for student unions, you've probably seen those great looking gigs where you can spend 3/4th of your time at work doing homework.
While you may wonder why we've chosen an on-campus job as our top financial "tool" on the list, suffice it to say it embodies what your experience with finances should be like in college. Yes, a job helps financially, but it should also be geared towards complementing your studies. It should be flexible, and keep you on campus where you can really get the most out of your college experience.
If you're interested, there are often options to apply for work study jobs as part of financial aid packages, or you can contact HR or department heads at your university. For a list of good on-campus jobs, check out Peterson's college bound blog here.