Money management is often the most difficult task for new students and applying for a student card immediately may not be the smartest thing.
It’s especially hard for those who have never had to budget or think twice about expenditures. Some of us will grasp the basics of juggling funds to meet our needs.
Those who don’t learn to plan ahead for expenses will be perpetually broke and may end their college years with a large debt load or ruined credit scores.
If you feel your money flows through your fingers and disappears consider the money management tips below.
1. Know Your Risk Areas
We all have areas that click our internal “gotta have this” button and it’s just that button you need to learn to identify and avoid. If you are a clothes horse, don’t go to the mall.
For you, there is no browsing as you will always see something you must have. Maybe you read several mystery novels a week or buy new videos you’ve looked forward to.
If you add up the spending for small items over a month, it can add up to a big expense on you credit card.
Abandon the bookstore for the library, the video store for video rentals (the cheaper plan). If there is something you must have, save until you can buy it with money dedicated and available for that purchase.
2. Student Credit
Thousands of budget impaired students have been led into debt by the easy money of credit cards.
The problem is serious enough to be addressed in new credit laws making it more difficult for students to get credit without proving they have income to pay the bills when due.
Having a credit card to use for emergencies is an excellent money tactic – if you are capable of defining what an emergency is.
A sweater sale is not an emergency unless you are freezing. The ease of using your credit card to buy lunch, pay for hobbies or impulse purchases can quickly lead to a crushing debt load.
3. The Real Cost of Credit Cards
If you have a student card do you know what the interest rate is? Do you pay attention to the account and pay the bills on time?
Do you look closely at your bills when they arrive to see if the interest has changed or do you toss the unopened bill in a drawer?
Students are told (by the credit institutions, of course) that using a credit card is a great step to building a personal credit file.
That’s true only if the card is used responsibly. Misusing that credit account will build a credit rating that will haunt rather than help you.
4. Get Help if You Need It
If you feel you are in over your head with your spending habits or use of credit cards, get help before the problem is out of control.
There are consumer services to help manage debt that you currently have and some excellent money management books, courses and seminars.