Budgeting Tips To Ensure You Don’t Go Broke Because Of Your Education

Posted on Dec 17 2013 - 3:09pm by Editorial Staff

Budget

Going to college is important. It’s also really expensive. In addition to (probably outrageous) tuition costs, you have to come up with money for room and board, and supplies for your classes (which can get expensive, particularly for art and music classes). Then, of course, there’s the peer pressure that comes from college life, the feeling like you have to “keep up with the Joneses.” That’s the worst.

How are you supposed to manage all of that and not go completely broke or mire yourself in tens or even hundreds of thousands of dollars by the time you graduate?

1. Track Your Pennies

Putting aside your feelings about the worthiness of the penny as currency, it is important that you always know exactly how much money you have on hand, how much you’re going to have coming in, and how much you will be sending out. There are lots of online financial planners that will help you do this. Lots of them can even be integrated with your bank account so you don’t have to remember exactly how much you spent where (unless you use cash).

Check your planner every day. This way you can see what still needs to be paid out and what you’ve got and spend (or don’t) accordingly.

2. Get a Job

You might have dreams of simply going to classes, doing your homework, and joining a few clubs while you are at school. In fact, that might even be what your parents have told you to do. But here’s the thing – a job (you can limit yourself to 12 hours a week so it won’t interfere with your studies) is about more than bringing in money. It’s also something that keeps you busy so you won’t be as tempted to shop or go out to expensive activities (like movies, dance clubs, etc.) when you’re done with your homework and find you’ve got a bunch of time and nothing to do.

3. Pay Interest Now

You’ve most likely had to take out at least one student loan to help pay for your educational costs. It’s true that you won’t have to start paying on this amount until after you graduate. It’s also true that this loan starts accruing interest as soon as it hits your bank. Pay down your interest every month so it doesn’t have time to compound upon itself and mire you in even deeper debt. Even if you can’t afford to pay off all of a month’s interest charges, any little bit you can put toward that amount will help you after you graduate.

4. Run Away

Credit card companies love college campuses. They set up tables and talk students into signing up for card after card. It’s true that you need to start building a positive credit history, but having a bunch of available credit at your fingertips can be incredibly tempting. Worse, the cards these companies are trying to talk you into usually come with incredibly high interest rates because the credit companies are counting on you not being smart enough to read the fine print.

To start building a positive credit history, apply for a card at your bank. If you’re worried about overspending or temptation, open a secured card with your own funds serving as collateral. Then, don’t charge any more than you can pay off every month (charge the personal hygiene supplies you have to replenish every month and nothing more). This way you get into the habit of paying your bill on time, you build credit, and you won’t have to agree to an exorbitant interest rate.

5. Apply for Grants and Scholarships

Prior to your first day of class, contact your school’s financial aid department. The staff in this department specializes in helping you to maximize the amount of aid that you receive by having you fill out a Free Application for Federal Student Aid form. The government uses this form to determine how much financial aid you require to complete your schooling that year and this amount often includes grants that you will not have to repay. The financial aid department can also direct you towards scholarships for which you are eligible, making it even easier for you to minimize your debt.

What are some of the things you’ve done to keep yourself on track financially while in school? What mistakes do you wish you hadn’t made? Share your stories in the comments!

Photo Credit: Flickr/Tax Credits

About the Author
Editorial Staff

Editorial Staff at I2Mag is a team of subject experts led by Karan Chopra.