Financial Tips for College StudentsAs school ramps up, many students will find themselves either on a college campus for the first time or aiming to get back into the college routine. This exciting occasion will come with tons of new challenges, especially financial ones, which is why it’s important for college students to be prepared. Whether it’s your first year on a college campus or your fourth, there are key aspects of personal finance that you should understand to set yourself up for success in your post-college life. Here are the four financial tips that will benefit you the most:

Know how your education is funded

As a student receiving financial support, either through scholarships, parents and/or financial aid, it can be easy to overlook the exact breakdown of how your education is being funded. For example, many financial aid packages might include multiple types of loans with varying interest rates even though the funding may be presented as a single package. Additionally, some scholarships come with stipulations regarding how they will be applied to tuition and/or housing. This is why it’s very important to know exactly what portion of your expenses are covered through each source – scholarships, grants, loans, employment, work-study, etc. Knowing this ratio will allow you to make adjustments whenever necessary, as your expenses or funding options may not stay consistent from semester to semester.

Although you may already have your finances squared away for this semester or year, here are some things to think about before deciding on next semester or year’s financing options. There’s no ideal mix to strive for but, as you’re likely aware, loans have costs you’ll have to pay down the line, regardless of your future financial health. While you can choose other funding sources the trade-off, of course, is that employment and work-study require you to maintain a schedule open enough to accommodate working regularly. Also, scholarships and grants can be time-consuming to apply for with no guarantee of success as well. Although you should strive to reduce the number of loans you take out, as you will be responsible to repay the loan after you graduate, you should personally evaluate your situation and determine what type or amount of funding would realistically best suit you. If you need help with this process, you should speak to your parents, college counselors or other adults you trust. Those who are getting financial help from their parents or families may not have to worry quite as much about how the funding will impact their post-college life, but they should at least be aware of how much their education costs because it’s likely a major investment.

Know your monthly spending habits

College is a time of learning both academic knowledge and life skills. Since you’re likely going to be living on your own, it’s very important to take college as an opportunity to teach yourself how to budget. You should make a list of everything you’re responsible for paying – like rent, utilities, textbooks and tutoring – so that you can know how much you’re spending. Separating expenses out like this also allows you to see areas where you might be able to cut back and save. For example, if your food expenses seem unreasonably high, you might look into alternative meal plan options or opt to cook your own meals. As a college student, there are many ways you can save, but you likely won’t know where you can afford to save until you budget.

Get a savings account to practice for the future

Financial experts have touted the importance of building savings as early as possible. This advice is not lost on college students, but some might feel that college doesn’t provide the proper environment or the opportunity to save effectively. This isn’t true, though, and combined with the advice listed above, students should be able to start saving money — even if it’s just $5 per week. Ultimately, any money that a student saves through budgeting should be placed into a savings account. Doing so successfully and regularly is a great way to prepare yourself for handling your finances in the real world, as well as provide you with some extra funds should a financial emergency arise.

Get a student credit card to build your credit

College is the perfect time for a young adult to start building credit because if they use the card responsibly during college, they can set themselves up to get an apartment, create a utilities account, open a cell phone account and more in their post-college life. While it may be scary to open your first credit card, if you follow the advice listed above and stick to only using your credit card for expenses that you’ve budgeted for, you can enjoy both consumer protections as well as rewards and perks the card offers. Although some feel that credit cards only provide high interest and unfavorable terms, student credit cards are designed for students, which means they not only have decent terms, but also provide rewards for both good grades and responsible credit card use.

Below we’ve listed out some of the best student credit cards so that you can get an understanding of the ways these cards can help you grow credit without hurting your finances:

Discover it for Students

financial tips for college studentsDiscover it for Students has some of the greatest features among the student credit cards we review. The card offers an alluring 0% APR on purchases for 6 months, so students can ease into their credit card interest, and it has no annual fee. In terms of cash back rewards, cardholders earn 5% cash back in rotating categories — like Amazon.com, restaurants, ground transportation and more — each quarter (up to the quarterly maximum, currently $1,500, then it’s 1% back) and 1% cash back on all other purchases. You’re required to activate the 5% cash back earning each quarter, but Discover will remind you when it’s time to do so. That’s just the tip of the iceberg, as students with at least a 3.0 GPA will be given an additional $20 per school year (up to 5 years) and Discover will match all of the cash back you’ve earned at the end of your first year — this means if you’ve earned $200, Discover will match that and give you a total of $400 back! Finally, Discover provides cardholders with free identity theft alerts (this requires activation) and copies of their FICO credit score for free on monthly statements and their online account.

Discover it chrome for Students

financial tips for college studentsDiscover it chrome for Students offers many of the same benefits and options as its sister card featured above. Kicking things off is a 6-month 0% intro APR on purchases and no annual fee. Cardholders will also receive copies of their FICO credit scores and identity theft alerts for free after you activate them. The biggest difference between the Discover it Student card (detailed above) and Discover it chrome for Students is the rewards, as Discover it chrome for Students earns 2% cash back at restaurants and gas stations on up to $1,000 in combined purchases every quarter, then it’s 1% (no sign-ups required), as well as 1% on all other purchases. Discover it chrome for Students cardholders will also appreciate Discover’s match bonus, which automatically matches all of the cash back they’ve earned in the first year, and the $20 bonus they can receive each school year their GPA is 3.0 or higher (maximum of 5 years).

Citi ThankYou Preferred Card for College Students

Rounding out our list of the best student credit cards is the Citi ThankYou Preferred Card for College Students (a NextAdvisor advertiser). This card has a 7-month 0% introductory APR on purchases and some rewards that definitely make it worth considering. Cardholders get 2 points per every $1 spent on entertainment or dining out and 1 point for all other purchases. Points don’t expire or have spending limits. The Citi ThankYou Preferred Card for College Students also has no annual fee and offers a 2,500-point bonus (worth $25 in gift cards, electronics and more) that cardholders can earn after they spend $500 on purchases in the first 3 months of account opening.

College can be a stressful time with all of the assignments, exams and papers, but if you set aside some time to get in touch with your finances, you may pave the way for a successful financial post-college life. Follow our personal finance blog to learn more about how you can manage your finances and visit our reviews of the best student credit cards to find the right card for you.

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