High School Senior, Get Ready!
Long before students arrive on campus, freshmen at any given college or university already have their first homework assignment: Upon enrolling for their first fall term, students should study their cash flow situation.
Good financial planning for college is like a three-credit course for families. As part of that proverbial course, all students are encouraged to practice spending money and to finally learn to manage it. Students who do not handle their money well or begin to understand its management fall behind in college and have a hard time catching up later in life.
If you want to be financially stable when you leave college, you must be money savvy when you enter it. If you are a graduating high school senior, get ready for a crash course in money management the summer before you start college. Here are six steps to help you pass the test.
Build a First-Year Budget
Perhaps the single most important financial tool for college freshmen is a budget. Before you go to school, determine how much money you are going to need. Start with a list of your must-haves and nice-to-haves. Then start assigning dollar amounts to each of them.
If you are not sure how much things are going to cost, contact your school’s financial aid office. It will have well-researched numbers regarding how much it costs to live on campus, including the average price of housing, food, books and even entertainment.
Analyze Your Resources
What you have is equally important as what you need. Just like creating a budget for expenses, you should also create a budget for how much you have. Add up all your savings in savings, checking or investment accounts. Then estimate how many hours per week you can work during the school year and how much you will earn per hour. This will give you a good idea of what you will have to spend.
Do not forget your parents, either. Find out exactly how much money they are able and willing to give you per week, per month or per year.
Track Your Spending
If you want to develop good financial habits, start practicing them right away. Track your expenses while you are still at home. Keep track of what you spend to get a better idea of what you will need for eating out, getting around and personal items. Or if you’re not that great at tracking expenses, start with a set amount of cash and see how long you can make it last.
Get A Job
The easiest way to get money is to work for it. Be prepared to work between 10 and 20 hours per week while you are in school, and increase your hours significantly when you are not — starting now. Summer is a great time to load up on hours.
Live Modestly
Smart spending does not stop on the first day of school. It is a year-round endeavor. Be willing to live like a student. Go to the used bookstore to buy your books and to the used clothing store to buy your clothes. Learn to ride a bike or walk rather than feeling as if you need to have a car, which is a huge expense.
When it comes to financial aid, do the research and chose the best possible student loans for your financial situation. You will have to pay it back when you are done, so think as if you need to pay it back now. I guarantee you will get the best financial aid available to you.
