When children leave home to start their studies at college, they’re taking on an entirely new world to navigate. Not only does the level of education increase, but students also begin taking on multiple forms of independence — paying their own bills, feeding themselves and managing their own finances.
The process of mastering these tasks can take some time, and mistakes are sure to litter the path. However, big financial errors can plague young people and require years to fully recover from. It’s best to provide guidance from the start, to avoid damaged credit ratings, outstanding debts and other financial fallout.
With that in mind, here are three rules every college student should follow to maintain financial safety:
Keep Personal Financial Information Under Wraps
College is unfortunately the most common time for individuals to become the victims of identity theft. Multiple factors are at play. Close living quarters are often shared with other people, and many young college students are unaware of how easily their personal information can be stolen and used for fraudulent activity. Students need to take precautions with their personal information.
Another step that can be a huge benefit is enlisting the support of an identity theft protection service. Lifelock is one of many protective services that monitors your financial activity and information to identify potential fraudulent activity and protects you from having your identity stolen. These types of programs are an extra expense, but they provide a highly reliable layer of protection that can be invaluable to those naive to the risks they face.
Take Out as Few Loans as Possible
The cost of college is higher than ever, and it only continues to increase. The less loan money you can take during college, the less crushing your debt will be once you graduate and get a job. Fewer loans means savings on interest and more financial freedom when you get done with school.
Not taking loans is easier said than done — unless you have a plan. Get a part-time or summer job (or both), and put away money from each paycheck to cover your tuition and other school-related bills. Even if you can’t pay for the entire bill, covering part of it and reducing the amount of loans you take out can be a great way to graduate from college with a small student debt cloud hanging over your head.
Make a Budget and Monitor Your Spending
As soon as you know how much money you have for living expenses each month, draw up a budget that considers all your monthly bills and other expenses. Use online banking and other financial monitoring measures to track of how much you are spending in every category and keep your spending under control. By keeping track of where your money is going, you can make adjustments to your habits and avoid the overspending that can drain funds and lead to credit card debt.
Any college student is prone to making mistakes here and there, but awareness and education can prevent the serious mistakes that can leave financial scars. Instead of hoping financial disaster doesn’t come your way, be proactive in managing your money while your young.