While I was in college nearly 10 years ago, I didn't know much in the way of managing my personal finances. Unfortunately, I didn't have anyone to guide me in terms of what to do and what not to do with my money and I ended up getting in to debt pretty quickly. To make sure that doesn't happen to other young people, here are a few guidelines to abide by to set yourself up for financial success while in college.
Avoid credit cards
You've heard this one before, but it is well worth repeating here. Young college students are a prime target for lenders. This is because most times, this is the student's first chance at being able to "qualify" for a credit card, and they are often eager to have their first chance at making an "adult" decision. Sadly, like myself, many young people are not adequately educated about credit cards, debt, the devastating combination of high interest rates and minimum payments, and how late payments can be a cardholder's worst nightmare. Without adequate preparation, advice and supervision, students can end up in a mound of debt and negatively impact their credit scores before they know it.
Don't live on a student loan refund
I've heard many students brag about how much of a refund they received from the proceeds of their student loans. Many young adults think of this as "free money," which is so far from the truth. While a student loan may be necessary to afford the expenses of college, students should manage them responsibly as well. A loan for your college education is real money that will need to be repaid-with interest-in the future. It is better to just borrow the minimum amount of funds you need for tuition, room and board, and return the rest to the student loan authority. Another alternative is to apply the excess funds to the next semester's bill instead of borrowing more money-anything but the frivolous spending of a refund.
If possible, participate in a work-study program on campus or obtain a part-time job to support yourself while in school. Yes, it will be more work to manage school and work, but is practical life experience and will lessen your financial burden once you graduate.
Don't ignore the opportunity to invest or generate income while being a student
College students have the awesome advantage of being young and ambitious. This affords you the chance to be able to start innovative businesses, invest in the stock market, and generate income without having to worry about the obligations of those who have responsibilities such as mortgages, other debt, and families. This is not a time to be reckless, but the time to take advantage of age and opportunity. Getting your education should be first priority, but in your spare time, consider thinking outside of the box.
The college years can be very memorable and rewarding. My advice is to avoid the many financial traps that could interfere with your successful future, and you will be well on your way.