Before we know it, we will (tragically) be back in lecture halls and seminars, dutifully taking notes and gazing at new campus crushes. Between classes, social engagements, and the return of your favorite fall TV shows, there’s no time to be worried about your budget, credit, loans or other money-managing matters. Let’s be real, organizing your college finances can be overwhelming, but fear not — I’m here to help.
To help you make the most of the new school year, I reached out to financial expert Kimberly Palmer, author of Generation Earn: The Young Professional’s Guide to Spending, Investing and Giving Back, as well as some financially-savvy college students. Read on for tried-and-true advice for keeping your finances so well-organized that you barely have to think about them at all!
1. Do your research
I know, I know. It’s summer, and the last thing you want to do right now is work! At some point in life, though, you will have to know about topics like taxes, health insurance, college checking accounts, student loans, or opening your first credit card, so becoming familiar with these topics during college will only help you in the long run.
First, be sure to research policies related to your bank, credit card, insurance, or any student loans you may have. Even if you’re a beginner when it comes to navigating finances, it’s helpful to learn about things like insurance rates, deductibles, minimum payments, and repercussions for not following through on any of the stipulations of your financial arrangements.
Talk to your parents, your local bank teller, and even your friends, who likely have very helpful tips about avoiding financial missteps and suggestions for financial improvement. They’re going through the same things you are in college, so why not tap them for advice?
Additionally, there is a ton of information online about money management, including books, blogs, money-focused podcasts, and more geared toward college students and their financial preparedness. I recommend Financially Fearless by Alexa Von Tobel, who easily breaks down the complexities of money management for young people. She also shares the “50/20/30” method, which instructs you to spend 50% of your money on necessities, 20% on savings for the future, and 30% on whatever you wish. (So. Helpful).
Another potential resource is Debt-Free by 30: Practical Advice for the Young, Broke and Upwardly Mobile by Jason Anthony and Karl Cluck, who both found themselves in debt after graduating college. This quick read is full of financial tips and tricks that don’t require a business degree to comprehend; the authors basically did the work for you.
Remember, everyone’s financial situation is different, so don’t be afraid to ask around and seek out resources that are specific to your unique circumstances. Organizing your college finances can be intimidating, but start with some quality research, and you’ll be well-versed in fiscal matters in no time.
2. Review your past budget
Let’s be real, this is probably the least fun money-related task you can do. Going through your past budget means facing the harsh reality of your spending habits, which may honestly surprise you. However, it also means becoming aware of where you can improve your financial habits.
Before going back to college, review your spending from last year by checking your credit card and/or bank statements. Categorize spending into different themes, like travel, school or entertainment, and split them up by month. Microsoft Excel makes this kind of work really easy, and you can even jazz it up with fun colors and charts (which will hopefully make the whole process a little less painful!).
Sarah Silberstein, a senior at the University of Texas at Austin, says, “I averaged out my bills so I knew what I was spending…and tried to find places I could scale back.” Simply becoming more aware of your money and where it’s going is a great step in the right direction towards better money management.
3. Make a new plan (and stick to it!)
Incorporating a concrete financial plan into your routine is a great idea. For example, you may want to try keeping a weekly journal of where exactly your money is going and how much of it is going there. Mobile apps like Mint make this even easier, and help track your spending on your accounts to give you a clearer picture of your finances right on your phone — plus, the app even lets you know when you’re getting near your spending limit.
Palmer recommends making “a simple list…of all of your expected costs and income” on Excel or even by hand so that you have a solid, clear idea of your resources. “Then, you can make sure you are prepared to afford all of your expenses each month,” she tells Her Campus. And you can easily plan for any surprises from your budget!
If you’re a little swipe-happy and need to wean yourself off spending, try giving good ol’ cash a chance. Sarah says that sometimes, it’s “easier to control spending when using cash.” The reason: it’s more difficult to go on a spending spree when you can actually see the cash pile decreasing — as opposed to a credit or debit card, which makes money seem abstract and like it exists infinitely.
In addition to practicing beneficial new habits, see if you have some current tendencies that aren’t so wallet-friendly. For example, Palmer says “you can probably scale back” things like coffee and takeout in favor of eating in and entertaining friends at home rather than spending money on a night out. Check out HC’s list of even more helpful financial habits that will save you stress, worry and money.
4. take care of bills and loans
Darsheene Vital, a senior at Howard University, says to “always pay more than minimum for your bills!” This not only looks good to your creditor, but will also pay off in the long run (literally!) when your payments end earlier than anticipated and you don’t have to worry about even more fees because you missed a payment or came up short. Paying more than your minimum can give you a kind of financial insulation.
Palmer tells Her Campus that another important factor related to paying bills on time has to do with building good credit. If you aren’t careful about being timely with loan payments, Palmer says it can be detrimental. “Any lapses can have long-term repercussions, like hurting your credit score,” she says. Having a low credit score can lead to trouble in the future, whether you’re looking to get a loan for a car, apartment, house, or otherwise. Often, your credit will be checked to ensure you’re responsible enough to be trusted with money — so many sure you have a good record!
If your parents are involved with your finances, get in touch with them before you go back to school. Ask them about the status of your payments on tuition bills, insurance policies and loans you may have cosigned with them. If you aren’t aware of what bills and loans you are responsible for (or will be in the near future), check in with whomever is currently responsible so you can start to prepare.
Start your fall semester off on the right foot and try to pay off your cell phone, car or health (or any other) insurance, and maybe even the minimum payment on your debit or credit card! Having this weight off your shoulders will make for a great school year.
5. Consider investing
If you’ve done all of the above and are ready for another step, why not consider growing your assets? One option is to keep your money in a savings account, where it will grow at a given interest rate. You also have the option to invest your money in stocks and companies you think are growing. If you have some money left over from a summer job or internship, investing might appeal to you.
If you’re not willing to gamble, but have a comfortable enough budget to start investing, Palmer proposes placing “money in some kind of diversified fund.” This essentially means putting your money in an investment portfolio that spreads out your capital across many different potential sources of growth. A financial portfolio is just a given amount of money (generally called “assets”) and is designated to be grown through investing.
By using an investment portfolio, you decrease the risk of placing a big investment in one area that might not have the potential for a large return (and may even result in a loss). Palmer also adds, “You only want to do this if you have the flexibility to not use the money for several years.” Pro tip: don’t put all your eggs in one basket!
“When you head into a new school year, a lot is changing, including your cash flows, so you want to be sure you stay on top of it,” Palmer tells Her Campus. Plus, you’ll be happy that you did when you have three term papers due, an oral presentation, and a group project but no random alerts from your bank about unpaid bills to add to your mountain of anxiety!
When it comes to organizing your finances for college, don’t be afraid to ask questions about topics you don’t understand. It might seem like everyone around you knows what they’re doing with regard to their money, but that totally isn’t the case. We’re all just faking it till we make it! Take a deep breath and trust yourself. One day, you will be like Beyoncé waving a fan made of hundreds without a financial care in the world.
Sarah Silberstein, University of Texas at Austin
Darsheene Vital, Howard University