by Bo, May 06, 2013
Moving out on your own for the first time is both exciting and scary. The excitement stems from being completely in charge of your own life, making your own decisions, and doing things on your own time. It is scary for almost all the same reasons. One of the biggest things that really stress students out is learning to manage their own finances. Most of them have had some kind of guidance throughout the years, and now they have free reign over their budget. Without a little planning, they can learn some very hard lessons. Here are some things that can help learn to manage money.
Pay Bills on Time
The first thing that every student should learn is that bills need to be paid on time. The best thing to do in order to ensure you aren’t getting behind on any payments is to keep all of your regular bills on a schedule and add other bills as they arrive. This way you don’t have to set any reminders or try and remember on your own. When you neglect your bills the consequences are never good. Late fees and interest charges start accumulating very quickly and in no time at all the debt has increased significantly. This leaves you with even less money but plenty of time to which you’d paid it all on time.
Methods of Payment
Credit cards are a sensitive subject for many people. While it is true that they have interest rates and penalties, they also have rewards. If you pay things on time, interest rates do not have any effect on you. In many cases, rewards and points build up when certain types of things are purchased such as gas, groceries, or eating out. It can be a good idea to use a credit card to buy these specific items, because it is sound practice to build up a good credit rating. Just be careful to always pay your cards off every single month or things will quickly get out of hand and that rating could tank.
When paying rent, you might consider using a check. This way you will have a written record that you paid your rent, and on time. It also gives you a way to go back and review when you wrote the check as well. When you’re surrounded by a lot of students, all paying at the same time, it’s good to make sure you have your own records for everything you do.
Track Your Spending
Checks leave a great paper trail so you can easily track spending. Balancing a check book, if done correctly, helps to ensure that you will never overdraw your account. Checks are the easiest way to track spending, because even though cash can help control your spending, it may not help you to track where the money went and when.
Credit cards have the biggest disadvantage in this category because it is really easy to spend money when you don’t know how much is in your account. However you spend your money, you need to carefully monitor how and where it is used so that you do not go over budget and cause a lot of financial problems when college is finally over.