College is the first time many students need to be financially independent — and many are not ready. Budgeting, taking out loans, figuring out whether you need a part-time job, and saving money may all be new to you. Learning about financial concepts is key to preventing costly mistakes. Here’s a guide to get you started.
Comparing Your Student Loan Options
If you’re unable to afford tuition upfront, a student loan can be the solution. However, there are many different types of student loans — some better than others. It’s important to compare options by considering the repayment requirements and interest rates to ensure you find a loan suitable for your situation.
You may also be eligible to receive financial aid like grants and scholarships. These are preferable to loans because you never pay the money back. Make sure you research all your options and apply to any programs that are relevant to you. To receive more advice on financial aid options, you should visit the financial aid office on your college campus.
How to Budget
By budgeting, you ensure you have enough money for all your essentials. It means figuring out how much you need for each of your expenses (such as housing, food, clothing, school supplies, and entertainment) and setting spending limits. It may take you a few months to accurately calculate your budget because you’ll need to track where you’re currently spending money. Make sure you don’t forget to account for unexpected expenses.
If you have money left in your budget at the end of the month, the best way to use it is to split it into thirds. Use one-third for fun — as a reward for not spending all of your budget. Allocate the second third to debts, such as your student loan. Put the final third into a savings or investment account.
Should You Have a Credit Card?
Credit cards can make budgeting more difficult because they give you access to money you don’t actually have. Since interest rates tend to be high, you’ll end up spending much more if you’re unable to pay off your balance in full each month. Plus, missing a payment can hurt your credit score and have a long-term impact.
Your college may offer financial workshops and other events on campus covering topics like budgeting, credit, investment, savings, and financial aid. Take advantage of these — after all, there’s always more you can learn. Alternatively, you may be able to take an elective to improve your financial literacy while earning credit.
A smart financial choice all students can make is to move off campus. You’ll save money and be more comfortable — for instance, you’ll have your own room and be able to prepare your own meals, instead of being stuck with a pricey meal plan. For Durham College student housing, there’s Foundry Simcoe. Since our suites all are fully furnished, you won’t need to purchase any furniture. Plus, the apartments come with a washer and dryer to avoid you needing to spend at the laundromat and rent includes high-speed internet. Apply now to make your time at college more affordable.