Being broke and a college student is like a right of passage for many of us. It lets us explore all the ways we can make a solid dinner out of ramen noodles or how to make a night out of a few bucks with great friends. But can also make for terrible habits after you have to adult.
Here’s how to begin setting up financial habits that will let you leave ramen behind after graduation.
1. Seriously, Get Yourself a Budget
A budget isn’t to keep you from spending, but to make sure you spend wisely. Calculate how much income you receive each month, then subtract your monthly expenses. Begin with your essentials–rent, utilities, vehicle, groceries, and debts. Have your number? Now subtract 15% from that. This is the emergency savings you’ll tuck away until you need it. You know, so you’re not pleading for your roommate to loan you $40 bucks because you got a parking ticket. How you allocate the remainder is up to you, but remember, never spend it all in one place.
2. Follow Your Funds
If you were asked where all your money went, would you know? Thankfully, there are incredible apps out there to make tracking your funds as easy as opening up your phone. Apps like, Intuit Mint and Pocket Guard links to your accounts, subscriptions, debts, and more. It then displays graphs that show you where your funds went. And it’s also a wonderful way to get alerts when it notices suspicious activity.
3. Credit Scores Are Kinda a Big Deal
What’s car insurance, an apartment lease, and a new iPhone have to do with a credit score? Money. A healthy credit score means you’ll pay less for car insurance, pay a lower deposit for an apartment, and even be able to get interest-free payments for a new iPhone. And all of this is to only give you a glimpse into all the benefits of a great credit score. But how do you get that score up? There’s a myriad of ways to ramp your score up, but the easiest way is to pay your monthly bills in full each month and take out little to no debt.
4. About those Credit Cards
Credit cards are a bit like owning a car. They can get you to wonderful places, but if you’re reckless, you could drive off a cliff. If you’re very responsible with your money already, a credit card can be a great way to build your credit. If you’re a little unsure about your self-control, yet, want the credit boosting benefits and convenience of a card, there are less-known alternatives–secure credit cards. They work by having you place a cash deposit down for the card. When you place a purchase on the card, you have to pay the monthly balance back, but if you fail to, your cash reserve covers it. Yet, paying the balance in full each month will benefit your score and keep you from paying interest. Yet, if you fall into trouble and can’t make the payment, you lose only your deposit and won’t have debt collectors after you.
5. Check Your Attitude
It’s easy to dismiss all of this chatter about budgets as being too broke to save, so why bother. But here’s some real talk–everybody can and should budget. And when you begin to budget, we’re confident you’ll find a few bucks to save. Really. Even if you can afford to save only $10 a month, you’ll be better off. Because budgeting right now isn’t just about the amount you can save, it’s about building healthy habits now, so when you get that first big paycheck, you’ll know how to use it wisely.
Healthy money habits begin early and take practice to develop, yet, they’re applicable to everyone, regardless of age and income. So begin taking action now and you’ll be on your way to huge gains.