When you’re up and out of the house, ready to start managing your life, finances can present the most daunting challenge. But they can also be the most satisfying part of becoming independent, and are well worth getting a hold of. You can save a lot of stress and avoid mistakes by thinking ahead.
The best start to managing your money is knowing what you can do with it, and what you want to do with it. Planning out how much money you plan to spend each month and in what areas is a must–and once you’ve formed your plan, stick to it. Plan for the occasional treat with a built-in amount to spend freely. During the month, keep track of your expenses, so you can adjust your budget if needed and keep yourself in the black.
It can be tempting to take your first credit card and run with it, but it’s not a good idea. Rather than getting charged interest on everything, use cash or a debit card as much as possible. Credit cards are a good way to jump start your credit, though. Just make sure you get one with low interest and cash-back and don’t overuse. That spending limit isn’t a goal!
3. Minimize Borrowing
“Neither a borrower nor a lender be.” Shakespeare might have been a little too optimistic when he gave us this little tidbit, but it’s true that the less borrowing the better. You can do this by taking advantage of scholarships, cutting down on spending, and, if you have the time, maybe taking on a part-time job (all good things for having money in general). But, when you do have do borrow, government loans are generally the cheapest.
4. Smart Spending
You want your money to stretch as far as possible, especially when there isn’t very much of it. You can do this by exploiting student benefits like meal plans, renting or buying used textbooks, and hey, coupon clipping is in! You can also buy the things you need on sale. “Need” is the key word, though. Don’t buy a new pair of shoes just because they’re $30 instead of $60– you’re spending $30, not saving $20. But, if you really need new shoes, and were planning to buy them for $60 anyway, go for it.
5. Smart Saving
Smart saving is almost a redundant term–saving is always smart. Cutting down on unnecessary expenses and putting that bank in the bank really comes in handy later, and the earlier you start the better. Compound interest really works to your advantage when you save in your twenties, and you’ll thank yourself when you’re thinking about retirement–or when life hits you with a curveball.
Finances may never be exactly fun, but when you have them under control, at least they’ll never get scary. Starting smart in college will create lots of good habits for the future, and help make sure you don’t get buried in student debt. It’ll also help make sure you spend your money on what you actually want–instead of spending cumulative hundreds on ice cream, maybe you can get that new laptop.
Mary Baxter is a writer who understands the benefits of earning an online master in nursing degree when you want to further your career.
Image: Global X / Flickr