Get Smart! Financial Planning Tips for College Students
Here on the Summit Brokerage Blog, we previously published a blog entitled “Financial Planning Tips for High School Students Considering College.” Now it’s time to discuss financial planning tips for students who are about to begin college or who already are college students. A student’s college years are ripe for real-time learning experiences about financial planning; but real-life experience can be the toughest of teachers. Given the importance of this topic as well as the profusion of financial planning tips relevant and helpful for college student, we’ve split this topic into a two-part blog series. The instant blog will discuss creating a budget, smart credit card usage, and graduating early to save money. The upcoming second blog is entitled, “More Tips from a Financial Advisor for College Students and Smart Money Management” and will cover financial planning tips concerning college meal plans, college housing, and saving money on textbooks.
Check out these financial planning tips for soon-to-be and current college students that will hopefully begin to adequately prepare them for the financial realities of college and beyond:
- Money101: Create a Budget: While it may be difficult to anticipate your college living expenses before you actually start living as a college student, you should try as best as possible to anticipate your college living expenses in advance (you can always adjust your budget later on). List all your monthly income sources such as scholarship stipends, your personal savings, job wages, and parental allowances. Then list all your estimated monthly expenses such as rent, food, entertainment, personal care items, books, transportation, laundry, and the like. An easy way to track your expenses and manage your budget is through using a free online personal finance management and financial planning tool such as Mint.com.
- Paper or Plastic? Be Smart about Credit Cards: As a college student, you may be eligible for a credit card. The decision as to whether to apply for and use a credit card should be based on your self-awareness and fiscal responsibility. Are you impulsive, forgetful, or a big spender who always wants the latest and greatest thing? If so, then a credit card may not be for you as it could easily become a potential debt tool where it is all too easy to get stuck in the cycle of throwing your money away on interest payments and barely chipping away at your balance. However, if you are fiscally responsible and can be vigilant about paying your credit card bill on time and in full each month, then using a credit card responsibly can help you build good credit and establish positive financial footing for your financial future and ultimate financial planning goals (for example, establishing an excellent credit score early on will help you qualify for lower mortgage rates when the times comes that you want to buy a house).
- If Appropriate, Try to Graduate as Quickly as Possible: Sure, many people say that college is the best time of your life, so don’t let it pass by too quickly. But the financial reality of many students means the “Van Wilder” option isn’t a viable one. If you can graduate in three years instead of four—by taking summer classes, taking on a large course-load each semester, or getting college credit for Advanced Placement or International Baccalaureate classes taken while in high school—you can save a significant amount of money. While your tuition costs still may be the same (many colleges charge tuition based on the credit hour; so 120 credits hours over three years is the same price as 120 credit hours over four years), you will save a considerable amount of money not having to pay living expenses for that fourth year of college and will be able to enter the post-collegiate workforce faster. Although, keep in mind that if you have to work a considerable amount during college, graduating early may not be feasible with your packed schedule. Overextending yourself and then flunking out is costlier than taking an extra year to graduate.
For more information on Summit Brokerage Services, our first-in-class services, and making the transition toward becoming an independent financial advisor and growing your practice, visit https://www.summitbrokerage.com or call us at (800) 354-5528. To learn even more financial planning tips for college students, be sure to check back soon on the Summit Brokerage Blog for the second and final blog in this special series.
About Summit Brokerage Services
Summit Brokerage Services, Inc. is part of Cetera Financial Group®, a leading network of independent retail broker-dealers. Summit Brokerage provides a broad range of securities brokerage and investment services to primarily individual investors. Summit Brokerage also sells insurance products, predominantly fixed and variable annuities and life insurance through its subsidiary, SBS Insurance Agency of Florida. Summit Brokerage also provides asset management services through its investment advisor, Summit Financial Group, Inc.
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 Van Wilder was a 2002 comedy film starring Ryan Reynolds, who played a seventh-year senior at a college with every intention of staying in college as long as possible.