Get smart when it comes to managing your money
Credit Card Tips
If you're thinking about getting a credit card, there are some important issues to think about.- Find out about any fees associated with the card and select one with no annual fee.
- Choose one with a low credit limit, so that you're less likely to rack up a big pile of debt.
- Never use cash advances, which can result in major fees.
- ALWAYS pay your credit card on time. Otherwise, you're certain to be slapped with a late fee. (The average late fee is $29.)
Need proof? Check out how long it will take to pay off a credit card bill of $2,500 (the average credit card balance for college students is $2,700)-paying the monthly minimum and with no additional charges...
Credit card balance: $2,500
Interest rate: 18%
Minimum payment based on 3% of balance: $75.00
It will take you 15 years to be rid of your debt-if you don't charge anything else! During that time, you will pay $2,299 in interest alone!
Source: www.Bankrate.com
College expenses pile up fast-books, fees, laundry, a night out with friends-so managing your money will be more important than ever.
If you're not using a bank to keep track of your cash, now is the time to sign up.
Choose a Bank
There are two main things to consider when selecting a bank: location and account perks. The best benefits in the world won't do you much good if the bank is 30 minutes away. Check both ATM and branch locations; most transactions can be completed at an ATM, including withdraws and deposits, but there may be times you need to visit a branch. Once you've figured out which banks are nearby, you can compare account options. Look for these basics: no minimum balance, no monthly fees, free ATM transactions and free online banking. Online banking is a must-you can manage your account and pay bills without leaving your desk. See if your online banking includes an alert system-you can set it up to send you an email or text message if your balance reaches a certain amount, for instance.
Save it for Later
While you're in the banking mode, make sure you have a savings account, too. If you have one already, don't worry about moving it closer to your college-handy access is not a bonus for a savings account! If you don't have one, open one when you open your checking account. Through your online banking, you'll be able to set up a repeating transfer to your savings account, which will make saving money (almost) painless. Think about it: putting just $25 a month into a savings account adds up to $300 a year, before interest. An important facet of a savings account is that you need to stay out of it-it's not "saving for a new pair of jeans," or "saving for a new video game." That's your checking account. Your savings account should be for big purchases: car repairs (or a new car!), an apartment deposit, or a new computer.
Plan it Out
Take time to draft a budget, even if it's not perfect or entirely accurate. Figure out what your monthly income will be, whether it's from a job or from your parents, and calculate any monthly expenses. Include in those expenses any pre-determined amounts, like cell phone bills, car insurance, etc. Looking at what's leftover, you can determine how much you can afford to spend on food (groceries and eating out), entertainment (movies, concerts, sporting events, etc.) and everything else. Stick to the amounts you know you can afford, and you won't find yourself broke at the end of the month. Rest assured most of your friends will be facing the same budgeting dilemmas; discuss having a $20 weekend once a month, so that nobody spends more than that amount but still has fun. With four people, that money could easily rent a movie and buy pizza for Friday night, and pay for admission to a college sports game on Saturday.
Money-Saving Tips
Buy textbooks online
Visit www.cheapesttextbooks.com, which will search Amazon, Half.com and many others to find the cheapest prices. Make sure you're getting the right edition (email your professor or check an on-campus bookstore to be sure), and make sure
to order a couple of weeks before the semester begins. Campus bookstores,
even when selling used books, can rarely beat online prices, but it's wise to check their prices, too.
Don't use fee-charging ATMs
A $2 charge (and that's if your bank's not charging a fee on top of that) once a week is $28 each semester. That's an extra dinner and a movie that you've lost.
Keep track of your bank balance
It used to be that if you tried to make a purchase and didn't have money in your account, the transaction wouldn't go through. Now, however, many banks are approving the transaction-then assessing a hefty overdraft fee. So you could find yourself paying a $30 fee on a debit card or check transaction of only a dollar or two. Some students are finding themselves owing their bank hundreds, even
thousands, of dollars in such fees.
Know your bank's policy and be sure to monitor your account closely!
Add up the little things
Keep track of how much you spend on small items, like coffees, soft drinks, and snacks-all those things that are under $5 by themselves can still add up really quickly.
Budgeting sites:
www.ecampustours.com/campuslife/
www.finaid.org/calculators/
