7 Financial Tips for College Freshmen

Most people go to college to improve their lives and earn a degree that translates into the world of work. On the other hand, parents and college kids can be justifiably stressed about the financial implications of getting a higher education at a traditional college or university — especially if they’re relying on student loans to pay for school.

That being said, there are plenty of ways for college freshmen to save money as they move into the dorms and get their first taste of adulthood. Here are some of the top tips for freshmen preparing to start school in the next few weeks (or who have just started in the last week or two).

Assess your monthly spending situation

Nationally recognized consumer finance and budgeting expert Andrea Woroch says all freshman students and their parents should have a general idea of ​​monthly expenses so they can look for areas to save.

“Check your bills from subscriptions to car insurance to mobile data plans to make sure you’re not paying for services you don’t need or use,” she says.

For example, regarding your phone bill, she adds that a recent study found that people waste money on unnecessary unlimited data plans because they actually use less data than they thought. In this case, switching to a lower data plan may offer better value.

To find out if you really need unlimited data, Woroch recommends checking your data usage and seeing if your carrier offers a cheaper option to cover your actual usage. From there, you can consider switching to online-only cellphone providers like Mint Mobile, who sell services in bulk and offer talk, text, and data for as little as $15 a month.

“They even provide usage breakdowns and suggest cheaper options in case you’re using less data than you’re paying for,” she says.

Woroch adds that you can consider slashing streaming subscriptions and streaming content for free through your library’s digital platform for further savings. While saving just a few bucks here and there to slash or cap subscriptions, even small savings can add up and give you more room in your budget to afford groceries and other day-to-day college living expenses.

Get free stuff when you can

Woroch also says that before buying anything for a brand new dorm, freshman students should consider thrift stores, online resale sites, or second-hand refurbished options.

You can find used clothes on sites like Poshmark, join Buy Nothing groups on Facebook, shop for used furniture through OfferUp, and make significant savings through direct liquidity sites like Secondipity.

Nextdoor’s For Sale & Free Boards is also a good place to find used mini fridges, bed boosters, school supplies, and more. You can also get free stuff for college just by asking around.

Don’t automatically buy new college textbooks

Meanwhile, you can also take care of free or gently used textbooks, which can save you big compared to buying new. For example, you may be able to purchase used textbooks from last year’s students or through your school bookstore.

You can even rent textbooks through Chegg.com or Textbookrentals.com instead of buying them to save some money, Woroch says. She adds that you can increase your savings on these and other textbook rental sites by checking out coupon codes on sites like CouponFollow.com.

Always look for student discounts

dr Jaime E. Peters of Maryville University says freshmen should make a habit of looking for student discounts whenever they can. This makes sense when you consider that the average student discount can be worth more than a 10% discount and since student discount savings can definitely add up over time.

“Your student ID can be used as a discount card in hundreds of places,” she says, adding that Apple’s company
to Zipcar have student discounts. Even movie theaters and Amtrak offer significant discounts for college students, but you don’t automatically get the discount. You must ask.

Start a monthly budget

Financial planner Katie Kavehrad of Paradigm Wealth Partners says freshman students can be successful if they learn how to budget and stick to it early.

“Make a plan for every dollar and review it regularly,” she says. “This habit will serve you well in your post-college career.”

While you can create a written monthly budget with pen and paper, Kavehrad says there are also many great budgeting tools, including YNAB, Mint.com, and EveryDollar. Mint, in particular, is completely free and helps you keep track of where your money is actually going each month.

Kavehrad adds that parents who contribute to their child’s college expenses should ensure they communicate in advance and set financial limits on what types of expenses will be paid for and what the child will be responsible for. That way, money earmarked for groceries is less likely to be used for a weekend tab or shopping spree.

Automate your savings

Investment adviser Dan Casey of Bridgeriver Advisors says freshmen who want to work should strive to build positive saving habits. This includes learning the concept of paying yourself first, or making sure you set aside a certain amount of every dollar you make before spending it elsewhere.

While it’s wise to set some money aside in a savings account, Casey adds that a Roth IRA can be a good choice for college students, as it allows them to invest their savings so they can grow tax-free. Money in a Roth IRA Compound is not only tax-free over time, but withdrawals are tax-free after the age of 59½. Contributions to a Roth IRA (but not income) can also be withdrawn at any time without penalty, so that money can be accessed when you really need it.

However, it’s important to note that college students need an earned income to invest with a Roth IRA. Income limits also apply, but these are usually not a problem for students working part-time.

Be wary of credit card offers

Finally, financial advisor Andrew Rosen of Diversified LLC says it’s wise to be cautious when it comes to looking at the new student credit card offers that are almost certainly coming your way.

If you’re looking to get your first credit card or are aiming to build credit, he recommends looking for a student ID card that doesn’t incur any fees, and then charging only for purchases you can afford to cash out immediately. From there, you should pay off your credit card balance in full each month to avoid the credit card interest rate hammer that would otherwise occur.

While carrying a balance might seem harmless, the average credit card interest rate is currently over 17%. As a result, paying interest on your balance makes everything you buy cost significantly more than it should.


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