5 Resources to Help College Students Gain Financial Independence was originally published on Firsthand.
Moving away to college is a huge step in a young person’s life. Not only do they leave the watchful eyes of their parents and high school teachers, but they also step into the adult world of personal finances. For many students, paying for college is the biggest priority on their minds. That may involve taking out a loan (or multiple loans), working on the side, or starting at community college to keep things more inexpensive.
It’s important that college students have access to the resources they need to succeed financially. We’re reviewing five of the most important resources that every college student should have to help pay for tuition, housing, and a little fun—and maybe even stashing some money away in savings.
The first thing that many college students should absolutely learn how to do is manage a personal budget. Living at home rent-free as a teenager, it’s easy to feel like your spending budget is whatever money you happen to run into.In college, things get a bit more serious. You likely have to pay rent, at least partly cover tuition and fees, and still figure out how to have some cash on the side to go to a cool cafe, restaurant, or club with your gang. These are some budgeting tools that every college student should know:
- Budgeting apps: There are plenty of apps that you can use to start a budget, keep track of spending, and monitor your net worth. There are tons of great options out there, from straightforward ones that give you end-of-month summaries, to fun ones that aggressively remind you to stay on track.
- The envelope method: This budgeting tool is tried and true. Simply withdraw a set amount of cash every month and put it in an envelope. That’s it: there’s your spending budget for the month. The rest you can allocate to bills and savings. You can also do an electronic version of this method by loading a debit card with your monthly allocation and spending it with that, if you prefer to go cash-free.
- Track your spending: No matter what method you choose to use, try to keep a spreadsheet that shows how much you plan on spending in each area. This helps you plan ahead, and limit the amount you intend to spend on each area, like fun, dining, or a car payment.
Savings Account Growth
College is the perfect time to get serious about savings, if you have the wiggle room to do so. In college, many students get jobs on the side to help cover monthly costs (more on that below), which means you may end up with a healthy chunk of pocket money once the monthly necessities are covered.
If you do have a bit of extra cash, it may be tempting to allocate it toward the fun portion of your budget. However, a smart move would be to save it instead. Savings can feel like a bore, but it’s incredibly necessary. Savings can help you prepare for:
- A medical or other emergency
- A sudden flight
- A once-in-a-lifetime opportunity, like a concert by your favorite band
- A major life goal, like a house or wedding
Having even a little savings can help a ton, especially once you graduate. You might even need it to help cover your student loan repayments before securing full-time employment. Consider opening a high-yield savings account to help supplement your personal savings efforts, and give yourself the cushion you need to be comfortable.
Just like everyone else, college students have to do their taxes. And, in fact, taxes for college students can sometimes be pretty tricky: You may or may not be your parents’ dependent, you might be able to deduct your student loans from your tax burden, or if you’re independent, there may be a ton of government tax relief you qualify for.
If it’s your first time handling your own taxes, it can seem pretty daunting. Working with a professional tax preparer can actually be an instructive and helpful experience for many students. And, for those who aren’t familiar with the complexities of tax filing, getting professional help could actually end up saving them more money than doing their taxes themselves — and help them avoid any headaches that could be incurred from doing taxes improperly, like an audit or finding that you can’t pay your taxes.
Beginner Investor Resources
For more ambitious savers, it may be wise to consider investing on top of adding to your savings account. Luckily, now more than ever, there are easily accessible and simple-to-use investing resources on the market. From robo-investors that automatically allocate your funds to a diverse portfolio in line with your goals and risk tolerance, to intuitive investing apps that allow you to day trade with small sums of money. And because of the power of compound interest, getting started investing early has massive benefits. Just a few years’ head start in investing can lead to thousands of dollars’ difference some decades down the line.
Lastly, the biggest resource that can help any college student grow in their financial independence is simply getting a college-friendly job. Becoming more responsible, showing up to work on time, and working hard for that paycheck is a great skill to learn—and one most college students will likely be using the rest of their lives! College-friendly jobs include part-time gigs that you are able to work at around your classes such as an on-campus RA, an off-campus mover, or retail or food service.
Plus, having the extra cash to cover the monthly costs of college is one of the best ways to be able to allocate more funds to each of the resources discussed in this article. Simply put, one of the best ways to wisely manage money is just to have more of it.
College is the perfect time to become financially literate, on top of becoming a learned person in whatever area you choose to focus in. Take the time and the resources you need to become financially independent, and you will benefit for the rest of your life.
Samantha Rupp holds a Bachelor of Science in Business Administration and is the managing editor for 365businesstips.com. She lives in San Diego, California and enjoys spending time on the beach, reading up on current industry trends, and traveling.