Smart Financial Tips for New College Students

As you begin college, you also start your life as an independent adult. This is the time when you take on your own financial responsibilities. It can be intimidating as you get started, but there are many things you can do to start off on the right track.

Follow a Budget

One of the hardest parts of beginning your financial independence is keeping track of your spending and your income. According to You Need a Budget, if you don’t keep track, it can be easy to overspend and end up without enough money to cover necessities like rent and food. The solution to this problem is to make a budget. There are two main steps to creating a budget. First, you need to determine your income. Knowing how much money you make will determine where that money can go. Next, you need to determine your fixed expenses. This includes things like rent and utilities that will remain the same month to month. Your variable expenses, like food or entertainment, are those that fluctuate each month. These variable expenses are the ones that you can adjust within your budget to make sure you have enough money for all your needs.

Get Renter’s Insurance

Renter’s insurance is a type of insurance that protects your property. If it is lost or stolen, you are covered by your renter’s insurance so you can replace things. This insurance also covers certain damages including storm damage. You can also receive liability coverage which offers protection if someone is injured on your property. Since you can’t predict what will happen while you’re away at college, you can benefit from having renter’s insurance. It will give you peace of mind and you won’t be at a loss if damage does occur to your belongings. Additionally, some landlords will actually require that you have renter’s insurance. There are many policies available, and they will provide different coverage. According to Insurance Center Associates, you should ideally have $100,000 in liability coverage.

Use Credit Responsibly

As you head off to college and become financially independent, you may find yourself using credit cards. Credit cards can be a helpful way to build your credit score by making on time payments. However, credit cards can also easily lead to debt. You want to make sure you understand how to use credit cards and avoid overspending with them. According to Student Loan Hero, it may be helpful to find credit cards designed for students to get you started.

Once in college, a lot of the financial responsibilities your parents had will now fall on you. Now is the time to learn how to be financially responsible. Make yourself aware of good resources to help you begin your financial journey.

Read this next: Money Management 101 for College Students