The time has finally come! You are off to college and are beginning to experience many of the freedoms that go hand in hand with adulthood -no one telling you what to do, where you have to be, or what to do with your finances. However, as we all know, “with great power comes great responsibility. And how to properly handling finances is one of the greatest lessons you will ever learn.
Balance is key. It will be tough to juggle your schooling, new responsibilities, and financial freedom. So, here are a few tips to help make the transition a little bit easier.
Economics, accounting, investments, oh my!
One of the first steps in learning how to handle your new found financial freedom is to enroll yourself in some sort of finance course at your university. Depending on the knowledge you already possess, you can opt to enroll in a basic finance course or advance. It is suggest that no matter what you already know, you should begin with a basic course. In doing so your memory will be refreshed or you will learn:
Create and balance a budget
How credit card interest works
The best to ways pay off debt
How to be money savvy
These invaluable basic principles will assist you immensely in years to come.
Say NO to credit…for now
It’s difficult to receive those generous credit card offers in the mail and not be tempted to apply. DON’T! Using credit the wrong way will not benefit you in the long run and can possibly damage your credit in the long run. Before you apply for credit cards try:
Living on your own for a minimum of one year
Have experience successfully living within a budget you have set for yourself
Successfully demonstrate financial restraint
Did you say budget?
Yes, now that you are on your own it is essential that you understand how to properly budget your finances. Creating a budget is simple. All you need to do is:
Make not of your net income
Make note of your expenses (including rent, utilities, food, travel, laundry, etc.)
Add a miscellaneous section for recreational activities (movies, dinners, etc)
Pay close attention to your budget to be sure that you do not overspend. The whole point of a budget is to help you save money you do not necessarily have to spend.
The paths of your new found freedoms will take you on the most important journeys of your life. Embrace it all. Do not be afraid. Instead, Do your research and take your time. You are going to be just fine.