Concerts, parties, upscale restaurants, shopping sprees, road trips and more. It all sounds very lovely and lavish. That is until you have overdrawn your account. Then reality sets in.
College students often struggle with personal finance, in fact, according to CNN.com, millennials have a negative 2 percent savings rate. Well, here are five major tips college students can follow in order to better those numbers.
Tip one: Put yourself on a budget. Only spending an amount that can be easily replaced. If you wait until you have more money coming in, then your account won’t look like it’s taking such a drastic hit. For example, let’s say you want to go shopping and you have the funds to do so right at that moment, still hold off until your main source of income arrives. Because even though you may have the funds now, at least you won’t have a lot of money going out and no money being deposited.
Tip two: Choose something specific to save for. Whether it’s a birthday trip, a car, or simply a Christmas gift to yourself, setting a goal and following through can help discipline college students with their money. What better feeling than achieving a goal you worked hard for, right?
Florida A&M University student Fonzi Selmour can vouch for this logic. “I have a travel jar. Which is a jar full of cash that I get from the tips from my job. My job gives us tips every other week, so I take that money and put it into a jar and I don’t touch it. That helps me save money for when I want to go travel or visit somewhere,” says Selmour.
Tip three: If you absolutely have to spend, do so wisely. For many college students, spring break is a temptation. But, there are ways to have an eventful spring break without breaking your pockets. Dozens of fun activities can also be quite inexpensive. A scenic boat ride that sails near the houses of celebrities, a tour through the Everglades, the beach and more. All of which costs under $25.
Also, instead of 5-star hotels, try Airbnb. Airbnb is an online hospitality company that allows people to rent rooms or houses for their vacations. These houses are always unique and up to par for a fairly lower price. These are just a few examples, but it can apply to several occasions. Some people call it “taking the cheap route,” but you will be saving money and getting the same experience.
Tip four: This is a big one, and probably the most important — establish credit. All college students think about life after graduation, but a big part of life after graduation is credit. Buying a car may sound great, but there is a process. Almost all car dealerships will need to look at your credit history before settling on the price you pay. With no credit or bad credit, a down payment could be a few hundred dollars more than expected. “It’s very important for students to start off on the right track now when they’re young. Not getting into debt and getting well-educated on credit is crucial nowadays,” says Berta Perez, a personal banker at Capital City Bank.
Tip five: Practice your money saving habits. Develop those habits while you are still in school so you are not blindsided by life after college. “If only I had someone teaching me how to save while I was in college. I went broke a lot of times but I learned from it. My advice to students is to buy what you need, not what you want,” says Tallahassee Community College graduate Darius Gaskins.