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Jul 01, 2022 04:53 PM EDT

Money Tips for New College Students

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Photo by Element5 Digital on Unsplash

(Photo : Element5 Digital on Unsplash)

As college tuition costs have soared, more students are unprepared to manage their finances, and this can lead to disaster down the road. Many students have thousands of dollars in debt once they graduate college, and if you are looking to leave home once you graduate, you will need to know how to manage your money. Taking the right steps now can lead to success later on.

Make Sure You Can Pay for College

It's a good idea to sit down and look over your finances before each new school year begins. Look over any aid offered to you, and see how much money you have in the account. It can be tempting to throw it all at tuition so you do not have to borrow as much, but you will also need some for living expenses and textbooks. Create a rough estimate of your monthly expenses so you know how much money you will need to have saved up. You can also take out a student loan to cover part or all of the cost if you find your savings fall short.

Limit Credit Card Spending

Having a credit card can help you build credit, but it is important to keep your debt low. Credit cards are not a source of cash, as they are only designed to help you spend your own money. If you carry a balance and miss payments, your credit score can go down, and it can take you much longer to be on your own after you graduate. Even if you won't be taking out a mortgage for a home right away, a low credit score can reduce your chances of getting a good apartment to live in. You may choose to start with a prepaid card to first build good habits.

Keep an Eye on Your Credit Score

There are many ways to keep an eye on your credit score, and consider getting reports from the major monitoring companies out there. That way, you can look for errors and make sure your identity has not been stolen. Review them as carefully as you can. There are free sites out there as well. Know that checking your credit score will not lower it or affect it in any way. If a lender runs a check on your score, it can affect it, like if you decide to apply for many credit cards at the same time. Keeping an eye on your score can only benefit you.

Consider Getting a Job

You likely already have a lot of responsibility while you are in school, but getting a part-time job can help you put some more money in your bank. You can also build more community and boost your skills by working while in school. Of course, if you work full-time, you might be taking on more than you can handle. Consider taking advantage of any scholarships, work study, or financial aid available to reduce your expenses. If you don't take advantage of all the resources available to you, you might be missing out on free money.

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