By Delta Jones-Walker, Gary Crusader
It’s summer time, and many of us are caught up in the excitement of celebrating high school graduates with parties, open houses and the like. Soon, they’ll be headed for college, which can be fun, exciting and oh yeah, expensive! I should know, since I also have a daughter in college and a son who will be headed off to school pretty soon. As a financial advisor, I feel compelled to remind parents and their college-bound children about some of the money matters to consider as you embark on this new chapter in life. Here are a few recommendations:
- Find a Bank That Works With Your College Situation
Going off to college presents a great opportunity to evaluate your banking options and determine what’s best for your new circumstance. The account and financial institution that made sense for your high school self might no longer provide you the greatest value – especially if you’re moving far away. Spend time researching the financial institutions that are near your child’s college or university to ensure that their banking products and services meet your new needs and will ultimately help them save money.
For example, some banks offer accounts with reimbursement for out-of-network ATM fees and a low minimum daily balance requirement, which could especially benefit college students. Other banking features that could be particularly convenient for students include mobile remote deposit, online bill pay, and person-to-person payments.
- Credit is Important, so use it Responsibly
College students must be smart with their first credit card. During their first few weeks on campus, they are likely be bombarded with credit card booths and seemingly friendly salespeople. Don’t be tempted to open a credit card just because they give you a free t-shirt, stuffed animal or a large pizza. Building credit is important, and so is opening your first credit account. Ask the representative to explain the fine print, and look for a card with no annual fee, good rewards, and of course a reasonable interest rate. If they tell you that the offer is only good for that day, do yourself a favor and walk away.
- Be Smart About Recurring Expenses Like Books
The campus bookstore is one of the most expensive places to purchase books. Instead, try borrowing your books from the library or buying books at reduced rates online using sites such as Amazon, eBay, Half.com and many others. Then, consider selling the books back at the end of the semester to put a little extra change in your pocket.
- Ditch the Car and Use Public Transportation or Ride Sharing
Besides saving on gas, parking and insurance, freeing yourself of the responsibility of owning a car can really change your freshman experience. Getting to know new people and sharing experiences with them is very important as a new college student.
- Don’t Take Out More Student Loans Than You Need
College students (and their parents) should educate themselves about all the possible loans and scholarships out there, and be proactive in taking control of their financial lives before they even get to school. Subsidized federal student loans with relatively low interest rates are one thing, but high-interest private loans are a very different story. There’s free money out there in the form of grants and scholarships. Soon-to-be freshmen should do some research and see if they’re eligible for any of these awards. You’d be surprised how much money goes unclaimed every year!
- Learn To Start Saving A Little Each Month
My best money tip for college students is to start saving small and incrementally increase. The easiest way to start, as a cash strapped college student, is to save all your coins and deposit them every week into a savings account with no ATM card (to avoid the temptation to withdraw for frivolous things). This may seem like an insignificant amount, but it adds up over time and starts the habit of saving. Incrementally increase by adding $5 each week and upping by at least $5 each month (or quarterly if money is seriously tight). This is a no-brainer way to save that’s easy, manageable and creates great saving habits for well into the future.
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*Securities and advisory services offered through Woodbury Financial Services, Inc., member FINRA/SIPC. Insurance services offered through Atled Financial Group 717 B Main Street Schererville, IN 46375 which is not affiliated with Woodbury Financial.
* Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future results.