It’s back-to-school season! Congratulations to those who are starting their college journey. For many, you may be the first to get into college or you’re supporting someone who is going to college. It can be scary to enter this new phase in your career, so here are five financial tips that could be helpful for you.
1. Get comfortable with money by budgeting.
To be frank, going to college gave me so much anxiety because of money. How was I supposed to sustain myself while going to class full-time? Budget. Budget. Budget. And get comfortable with it! Calculate all your expenses, specifically your monthly expenses. Then, budget how much you will use for groceries, toiletries, school supplies, etc. Have a specified amount for each item, and don't go over! Keep tabs on your spending by downloading a bookkeeping app. I like to use physical notebooks on hand. Another trend that's become popular recently is cash stuffing! Cash stuffing requires purchasing a small binder with small plastic envelopes to organize your budgeting using cash!
2. Get a debit card.
Some banks offer a college debit card; I recommend opening a checking account. This establishes your journey into financial independence and helps you manage your money. A student debit card should have few to no fees. Find the ones with no fees. Some banks offer tips for money management through their apps. It's easy to check your spending and balance with one tap on your mobile phone. Just don't go crazy and swipe your card everywhere because it's convenient; a debit card should be a resource for you rather than a burden. Spending works the same with a debit card; it's easier to have all your money in one place and make purchases on the go! Especially if you plan to work to gain more financial freedom. Direct deposit saves you a trip to the bank.
3. Research for Resources
If there's anything I've learned, try to take out the least amount of loans possible! Even though the Biden Administration is promising loan forgiveness now does not mean that it will be promised in the future. I suggest always making it a priority to research scholarships, grants, etc. Even though it seems like a far-reach, or you feel like you don't have a chance, trust me, you'd be surprised. I would spend a few hours one day a week just researching and applying for scholarships. You never know what you can find! Some scholarship apps require letters of recommendation, essays, or paragraphs! What's the worse that could happen? And what's great about these applications is that you can repurpose the materials; for example, many of the questions can be the same, and letters of recommendation can be recycled! In addition to looking for more scholarships, look to see if you qualify for food stamps.
4. Make Financial Goals
Now, something I wish I had known sooner is how to create goals for myself for financial stability. Even if they seem small, they will have a snowball effect. If time allows, babysit, freelance, sell some artwork, or pick up a small shift strictly for savings. You never know what can happen; the future isn't promised, so having a backup savings account is a must. Once you identify where you will get this source of savings, calculate how much money you will put into this account every month. This is how I would estimate a savings fund as an example:
Calculate your rent and monthly expenses such as groceries, laundry, clothes, and transportation… add it all together and multiply it by 3 months or 6 months. Once you have your number, divide that by 12. Commit to contributing a portion of your income to that savings fund.
You can use the same method for other savings goals, but an emergency fund is a must!
5. Don't forget how you spend your money will affect you in the long run.
It's exciting to have more freedom when you transition to college. But more freedom requires more responsibility. I know some colleagues who wish they would have been more financially responsible had they learned a few tips and tricks on spending wisely. So always remember the choices you make have results and consequences. Spend money wisely.
At PbA, we aim to uplift the next generation by providing you with the tools you need right here on this platform because we've been there! Special shoutout to Chicago Scholars and Chicago Urban League for their commitment to serving the youth and using our platform to uplift the next generation!