Know Who is Paying for What
If you are a dependent student, then your parents may still be helping you to pay for direct and indirect college costs. Make certain you have a productive kitchen table conversation with your parents to be clear about any stipulations your parents have placed on what they will help pay for college costs. Some parents may expect that you’ll pay for any club fees, team uniforms, and sorority dues. If you do, then you will need to map out a strategy to figure out how you are going to pay for these expenses and may be others that come up along the way.
Create a Reasonable Budget
Whether you get your money for parents, your earnings from a job, or a refund from financial aid, you need to think about where the money will come from to pay for the latte you get with a friend, grabbing that rideshare to get across town to the doctor, or buying some shampoo from Target. Once you know how much money you have monthly, it’s time to think about creating a budget for college costs and life’s other expenses. For some expenses will include rent and utilities. For others, it may only include “fun” money for an ice cream or a ticket to the basketball game. Remember that there may be fluctuations in expenses depending on the season because you may be grabbing a Lyft more often when the snow hits or you may have one-time costs like software for your web marketing design class. If you need some help creating the budget and tracking how much you are spending, consider free tools like Pocketsmith or Mint.
Choose the Right Checking Account
If you haven’t opened your first checking account yet, you should have it on your list of financial to-do’s before you head to college. Like anyone opening a checking account, you’ll want to ensure it is FDIC insured, includes online account access, and has a good reputation. As a college student, the best banking product will include no minimum balance and no to low cost fees. Why? Many college students have trouble maintaining the minimum balance. MyBankTracker found that the average basic checking account fee at the top 10 U.S. banks is at $9.60. Since many banks offer initial banking services without these fees specifically for college students, take advantage of them.
Decide on a Credit Card that Works for You
Credit cards can be useful tools to make purchases for college costs and reserve for emergencies. Although many college students either use a parent’s credit card or a debit card for everyday purchases, others start to establish their own credit by opening their first credit card. Explore whether or not you want to establish your own credit card now as a college student.
In 2019, Sallie Mae’s “How America Pays for College” survey found that students carried $1,405 in credit card debt. This means that students are being charged interest on the balance due. If you get a credit card, avoid the fees. Use the credit card judicially and consider a use-it-and-pay-it strategy for your credit card.
Colleen MacDonald Krumwiede is a financial aid and paying for college expert with over a decade of financial aid experience at Stanford GSB, Caltech, and Pomona College and another decade at educational finance and technology companies servicing higher education. She guides go-to-market strategy and product development at Quatromoney to transform the way families afford college.