Student Loan Dodgers

Going to college is a major shift in the routine. It’s also a major shift in responsibilities. Managing finances can be tough, especially when you have so many other new responsibilities to juggle. If you don’t have any particular experience in managing finances, you could be especially vulnerable to some traps that can cause problems for years.

To avoid these financial pitfalls, consider the following five tips:

Create A Budget
A budget is a financial roadmap. If you wouldn’t take a trip to an unknown city without using a map, why would you set off into money management without making some plans? A budget is a money map, and can help you figure out what you need to make, save and spend. Don’t leave home without one!

Learn How To Balance A Checkbook
Open a checking account and start using it, but remember that you can only spend what you’ve put into it. Write down every check, fee and ATM withdrawal, all deposits and other additions (like interest) to your account. Do this every few days. Use your own receipt and don’t rely on the bank’s records. At the end of the month, make sure that your records agree with the bank’s. If they don’t, find out where you went wrong and correct the record. If the mistake belongs to the bank, notify the bank right away.

Learn How To Use Credit Cards
Learning how to use credit cards is more difficult than you think. Paying for stuff with a credit card is easy. Paying the bill for the stuff you bought … not so much. Figure out how much you can comfortably afford to put on a credit card each month. Keep track of your expenses and know how much the bill is going to be before it shows up in your mailbox. Know when your payments are due and set up an automatic payment for your card to avoid late fees.

Work!
Taking a part-time job can help with unexpected expenses and can help defray the cost of living. You can also practice the lost art of saving. Don’t make the mistake of saving the leftovers – there won’t be any! Instead, take your savings off the top and make due with the rest.

Practice Discipline
Learn how to say no. Most of the expenditures you’ll consider will be optional. Learn how to pick the ones that are important to you and leave the rest behind. This is where your spending plan (i.e., your budget) will come into play. Let your budget be your guide when you’re considering a purchase. Beware the small purchases: they add up!