Money. There’s a good chance that, if you’re in college, you don’t have much of it, and you probably don’t have much experience managing what you do have. Whatever your financial situation, college is the perfect time to learn the basics of budgeting, saving, and investing for your future. Here are some steps you absolutely must take to manage your finances. Read on, and learn how you could win $1,000 through OCM’s Room Goals contest!
Keep School Costs Down
Did you know that the average student graduates with over $37,000 worth of student loan debt? That’s a year’s worth of salary for entry-level workers. Incredibly, it can take ten, twenty, or even thirty years to pay it all back — especially if you’ve got high interest rates.
Though your debt could end up being much less — or much more — there’s one step you should consider taking now: Pay something towards your loans every month! It could be a few bucks a month or a couple hundred when you get it.
Though it may seem like a waste of money to start paying before you actually receive your first bill, it’s actually a very smart idea. By starting your payback now, you can significantly lessen what you owe by paying down the principal before it starts accruing interest. A payment of just $5 per month can mean way more now than it will once you start getting regular bills.
Apply for Scholarships
Believe it or not, scholarships aren’t just for incoming freshmen. In fact, far from being the time to coast, now is when you should be ramping up your scholarship search! Apply everywhere and anywhere. Look in your community’s newspaper, on bulletin boards on campus, and on scholarship search sites. Plan on applying to at least ten scholarships a week, if not more.
The trick is to apply for scholarships that may be overlooked — ones that are $250-1500 range. While that may not seem like a lot when you have an insane tuition bill, several $1,000 scholarships can add up quickly!
One scholarship you simply can’t forget to apply for is OCM’s Room Goals scholarship. All you need to do to apply is submit a photo of your awesome dorm room and some info to be considered. It’s that easy — no tedious essay necessary!
Learn to Budget
Budgeting doesn’t have to be hard or complex. With little bills and income, we promise you that budgeting in college will only take about an hour each month to do. All you’ll need are your pay stubs, your monthly bills (like car insurance and phone), and a calculator.
First, write down how much you typically make in a given month. If you don’t have a regular income, or if you get tips that can vary from day to day, take an average or your best guess. Then, write out and total up your bills due. Next to each bill, write a due date, and then put that due date in your calendar so you don’t forget. Now, subtract your bills from your income and that is what is leftover for things like groceries, eating out, school supplies, and fun. Make categories that reflect your life and money goals and give each dime a place to go.
Open the Right Financial Accounts
You should have two bank accounts: checking and savings. These should be at banks that are close to campus and have online access. You should also have a debit card for at least your checking account.
If possible, set up your bills to auto-draft the amount from your checking account to your savings account each month. There are also apps like Qapital and Digit that will do it for you if you have a tough time pulling the trigger. Learning to save money while you’re in college will help you build a foundational good money habit.
Understand Financial Basics
Before pulling the trigger on anything financial, it’s a good idea to make sure you fully understand the terminology, methods, and costs. Grab a book from the library, take a financial literacy class, or read some blogs by other millennial money experts. The more you learn, the more confident you’ll be managing your finances.