The decision to enroll in college is an exciting chapter in one's life. Oftentimes, the decision to start college comes with questions about finances: how to maintain housing expenses, managing personal budgets, handling credit card debt, and sometimes the consideration of borrowing student loans. Financial Literacy is the promotion of financial education information available to students to help them make sound decisions about managing finances while balancing the costs of college life. Sign up with I GRAD today.
Financial Literacy includes several components to being successful and responsible with finances. Within those components: credit card debt, job searching strategies, and managing your personal budget, students should assess their own personal budgets yearly, and as situations change. Whether you are experienced in managing household budgets, or you are brand new to even opening a bank account, being financially literate helps you to get the best benefit in juggling college life.
Managing credit card debt is crucial to being successful in managing your personal finances. Credit card debt should be budgeted and managed monthly. Make payments on time, every month! Set a plan to pay off debt in a timely manner, and do not deviate from the repayment plan. Stay on top of your credit report and score, and make sure you are maintaining a good credit score. Credit scores dictate basic life needs such as securing housing, and even employment. Check your Credit Report annually for free. By checking your report annually, you are able to monitor suspicious activity (identity theft, collections accounts, etc.).
Saving for emergencies is critical to long term success as a college student, and in general, as situations arise in every day life. When you receive your paycheck, save some aside for emergencies. Build up to a liquid (easily accessible) fund and maintain that fund. Each time you get paid, pay yourself first. A good rule of thumb: set aside 10% of your monthly income for emergency expenses. That way, when you emergencies happen, you have some funds available to get you through the month.
Securing stable employment after you graduate from college is one of the most important aspects of financial literacy; without income, it becomes difficult to stay on top of your finances. Check out the My Next Move website to learn about careers you may be interested in, and what education and skills are necessary to attain those careers. Consider attending local job fairs in the community, work with the campus Career Services department, and use online resources such as careerjet.com and SimplyHired.com to find positions you may qualify to apply for. Keep your résumé updated, and work with experienced professionals on updating job application materials (cover letters, curriculum vitae, etc.).
Managing your personal budget while in college can become challenging with the cost of textbooks, transportation, and additional supplies. Financial Aid and scholarships may assist with the cost, but you may find yourself having to shuffle other expenses to meet your expenses each month. Check out the Understanding College Costs website to help manage your personal budget and to find out how to reduce the cost of college.
Get tips on where your personal budget measures up to college affordability: Budget Tips - College Costs. Do your personal expenses need to be reduced? Use the tips in the link above to assess areas in which you believe you can reduce expenses so college can continue to be affordable to you. Sometimes it is easy to give yourself a break and relax, but keep costs low. There are inexpensive ways to enjoy yourself without breaking your entertainment budget. Check out free festivals in the community, carpool with friends out of town, share the costs of dining and going out. Above all, limit yourself so that your entertainment budget does not end up being financed on credit! Save up for fun events, and reward yourself once in a while for all your hard work.
Complete the Financial Awareness Counseling. To do this, go to the StudentLoans.gov website and login with your FSA ID. Once logged in, you will be able to learn about any student loan balances you may have, find information about free money (grants, scholarships, etc), and information about how to continue working while going to college. The Financial Awareness Counseling will take about 25 minutes to complete, but is well worth your time to help you get a clear picture of managing your finances.