Guest Blog || Luke Smith
The first time a college student steps foot on campus (either physically or virtually) it’s an exciting experience, albeit an overwhelming one. As they learn to navigate their new campus, acclimate to university-level teaching, adjust to college homework assignments, and settle into a new social life, it can be easy to lose sight of a critical factor of academic success: proper money management.
If you’re a freshman who is just starting your college journey, take the time to keep your finances in good order. Here’s why.
There’s no doubt that college is expensive. The average student owes $40,000 when they graduate, with the collective student debt adding up to a catastrophic $1.5 trillion spread across 44 million borrowers.
This incredible cost has been fueled by a variety of different factors, including:
This is a crisis that school administrators and the United States as a whole must address as soon as possible. However, while leaders and politicians drag their feet on education reform, the cost of footing the college bill continues to largely fall on the students themselves.
This burden can be most poignantly felt by first-year students. Many of these find themselves leaving comparatively comfortable, financially stable childhood homes behind only to be faced by a barrage of real-life expenses via the intersecting financial requirements of everyday life and higher education.
Here are a few of the most common expenses that freshmen can expect to face as they quickly try to learn how to handle their finances on their own:
While most of these are expenses that all college students face, freshmen, in particular, must learn to balance them for the first time — all while still trying to focus on the primary reason that they’re attending college in the first place: to learn.
Financial planning isn’t something that should be left for the future. It should be addressed in the here and now. If you’re a freshman neck-deep in your first semester of classes, here are a few suggestions to help you keep your finances above the waterline going forward.
When it comes to finances, ignorance is not bliss. Make sure you’re aware of all of your income and expenses at all times. Do you work part-time? Do you have scholarships or grants? Have you taken out a student loan? Track every bit of your income.
Expenses are important, too. Everything from tuition and loan payments to eating out should be tracked and added up. This can help you avoid reckless spending as well as missed payments. Things like paying your student loans on time and in full are essential to long-term financial health, as they can keep you from defaulting on the borrowed money and can, by extension, preserve your credit for the future.
Once you have your income and expenses pulled together, it’s time to assemble a bonafide budget. Budgets aren’t meant to be scary or depressing. On the contrary, they should be treated as an empowering financial tool that can improve your financial situation and ameliorate or, at the least, mitigate the effects of things like debt.
Take some time to understand the different terminology required to properly budget your finances. Then, pull together a budget that lines up your income and expenses. If the latter is too high, look for ways to spend less money. If you have any leftover cash, use it to create a rainy day fund.
The struggle to afford continuing education is real, and it likely won’t go away throughout your four-year tenure at college. With that in mind, it’s important to adopt a growth mindset towards your financial situation.
Always be looking for ways to increase your financial knowledge. Look for financial tools, such as online resources, mobile budgeting apps, scholarships, and grants, that can help you along your college path. However you go about it, always be willing to learn and grow as you regularly revisit your finances.
Remember, you’re in college to improve your life. If you do so at the expense of your financial health, it can undermine the very reason that you’re pursuing higher education in the first place.
Instead, take the time to sort through your income and expenses. Then use them to create a budget that can help you maintain your financial health to the best of your abilities while you’re in school. If you can do that — and continue to develop your financial literacy, to boot — you’ll be in the best situation possible when you finally walk that stage in your cap and gown and prepare to launch into whatever the future may hold.