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Wednesday, December 12, 2012

Money management for students


Reduce educational debt by working, winning grants or scholarships and with savings
College financing often incurs opportunity cost, interest and debt

College is expensive, and for first-year students who are striking out on their own for the first time, money management can be a tricky – or even dangerous – concept. Students are setting up their future happiness through quality education, and do not want to limit their success by burdening themselves with financial mistakes that could affect them for years to come. Therefore, students need to think about their finances seriously before they begin their post-secondary schooling.

Budgeting


The most important thing students need to consider is a budget. A budget includes income and expenses, and has a balance between the two. In creating a budget, students need to consider all their sources of income, such as loans, grants, scholarships, gifts, savings, and job pay. This income needs to be equal to – or higher – than the expenses of tuition, fees, books and supplies, housing, food, utilities and deposits, transportation, clothes, and other fees. If a student’s income does not match their expenses, they either need to cut out some things or find a way to increase their income.

Financial awareness


There are many facts that students might not know about loans, student finances, and money management. For example, financial aid is meant to cover a modest lifestyle, but not extras like cell phones and entertainment. These extras will have to be covered in another way. Also, credit cards are a danger for students who have a limited income and may not be able to pay back their debts right away. Interest charges can add up over the years, creating major financial problems. Students also need to keep track of their transaction records and cards, preventing themselves from becoming targets of identity theft and fraud.

Savings


Students may not have much extra money to put aside but, if possible, they should put aside money for emergencies or unexpected events. For example, a lab or class might have to be repeated, or a book might have to be purchased new instead of used. Other considerations include rising interest rates on variable student loans and increases in transportation costs. Finding ways to be prepared for these eventualities like these is wise.

Income


Generating an extra income is one way to help ensure money is available when it is needed. This is because work helps students who are trying to save money and stay within a budget.  Students might consider working while studying. They can work as an online tutor or as a freelance writer for any trustworthy essay service. It's always better to consider more than one money management tip as earning an income is just one aspect of a financial plan and does not guarantee staying within a budget.

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