It is no secret that most college students simply do not know how to take care of their money. Most of us were not taught how to budget, handle bank accounts or balance a checkbook in high school. The extent of some people’s encounter with money is texting their parents when a card is declined or blowing their whole paycheck in one weekend.
The best way to be responsible with your money is to create a budget. One of the more popular budgeting strategies is the 50-30-20 rule. This means you put 50 percent of your income toward necessities, like bills and housing. 20 percent goes towards paying off any type of debts, or towards savings. Finally, the last 30 percent can be used on wants, like dining and shopping. This is a very helpful way to find a balance and can be very beneficial throughout all stages of life.
A hard concept for college students can be distinguishing needs from wants. Getting every new Apple product that goes on the market is not a need, that is a want. This will differ from person to person. One student may desperately need a new pair of tennis shoes, because they finally wore a hole in your favorite pair. But if you have five pair of tennis shoes already sitting in your closet then this is definitely a want. You also have to put aside a little money for emergency things like parking tickets.
A big problem college students can run into is never checking their balance. Their paycheck or money from parents goes into the bank and is never looked at again. It is important to always be aware of how much they have in their accounts and how much is spent. Luckily for us, most all banks have an app where you can track how much you spend. This is also important because overdraft fees are real and can really add up. Some overdraft charges can be up to $50.
Keeping up with your expenses is extremely wise in college, because research conducted by Javelin Strategy & Research found that it takes 18-24-year-olds twice as long to detect fraud. Which means someone else will have used all your money before you even know about it.
You can also set up text and email alerts for bank accounts. It will help avoid missing payment dates which can seriously damage your credit. We have all heard that credit cards are evil, to an extent this is true. Try to avoid credit cards, but if you know you are responsible then limit yourself to one credit card. It can help build up your credit score, but remember it can also kill it just as easily.
The bottom line is just responsible. Do not do unnecessary things to waste your money when it is completely avoidable.
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