By India Cooley, Student Finance Representative
Let’s face it now rather than later. The workload alone in college is stressful enough, and when the financial component of college life is added to that, you as a student may experience high anxiety and feel overwhelmed. You will eventually land that dream job and all that stress will be a blur, but for now here are a few tips that will help prepare you for success.
1. Take Out the Right Amount When Using Loans for School Related Expenses
Temptation to spend money lurks around every corner, and we need to be strategic when deciding how to manage our personal finances. Just because you are eligible for student loans does not mean you have to accept the entire amounts you are offered. Please remember loans are a tool to bridge the gap when grants and scholarships can’t cover the full cost of tuition and fees. Just like every other loan you will acquire in life, like a car loan or a mortgage, they will also need to be paid back Utilize the resources you have available and borrow an amount that will both allow you to complete your education as well as be financially prepared for life after college. Learn more about federal student loans and grants here.
2. Purchase Used Books or Rent Books When You Can
There are tons of free sites that offer used textbooks and rentals. Some students may want to keep the books absolutely necessary for their core classes, however there are classes where book rentals or used books will be sufficient. Check with your instructor to determine if previous versions and editions can be used. You can easily save hundreds of dollars per year by using helpful sites like Campus Books or Textbook Rentals.
3. Don’t Miss State Deadlines and Lose Out on “Free Money”
State grants are awarded to students demonstrating financial need. When filling out your Free Application for Federal Student Aid (FAFSA), it is important to know your state’s deadline to receive the grants. Because state grants are “free money” and don’t need to be paid back, many students will rely on them to help pay for their education. Often times they are awarded on a first come, first serve basis. Other states require the FAFSA to be completed by a specified deadline. If the deadline is not met, you run the risk of not receiving the grant from your state. Filling out your FAFSA early is a simple way to reduce your out-of-pocket costs.
4. Build Good Credit while Avoiding Credit Card Debt
Credit cards can be used to build good credit, but similar to student loans, you want to use credit cards carefully. Credit Karma or creditcards.com are websites that will allow you to view and compare various student credit cards. Just because you might be eligible for various credit cards doesn’t mean you need to apply for all of them. If you don’t have the cash to pay for something, do you really need it? Credit cards should be used to make small purchases that can be easily repaid once you receive your bill. Simply put, if you have the cash and can afford something but want to build your credit, go ahead and use your credit card. Always pay the balance in full, avoid making minimum payments and use your card responsibly.
5. Monitor Your Credit Report Regularly
You can obtain a free copy of your credit report at Credit Karma or annualcreditreport.com. It is best to check it periodically throughout the year to ensure there are no surprises. At minimum, your credit report should be reviewed once a year — and many find that checking around their birthday helps them to remember to do so. Your credit report is like your academic transcript and will list all of your open accounts. Your credit score is like you cumulative GPA and is weighed based on a number of factors including length of credit, payment history and the balances on your accounts. Your credit score will fluctuate, but there are things that can be done now to begin the process of establishing, building and maintaining good credit. One last note: you are at the highest risk of becoming a victim of identity theft between the ages of 18-29 because many consumers in this age range are not in the habit of checking their credit reports . Protecting your information is critical, especially once you hit 18 years of age.
6. Become Familiar with Your Student Loan Servicer
If you have received federal or private student loans, become familiar with your servicer. The servicer is the intermediary between you and the U.S. Department of Education. If you have a federal student loan, you will begin to pay your loans back once you graduate, drop below part-time status or stop attending college. The National Student Loan Data System (NSLDS) can help you locate your servicer. Create an online account or download the mobile app for your servicer. This will help you keep track of your student loans so you are informed about who and what you owe. It’s better to be informed than receive a surprise upon graduation. You can avoid defaulting on your loans by eliminating confusion with the student loan process.
7. Use Micro Saving Apps
It is never too early to begin saving for your future. Too often people prolong investing because they don’t think they have enough to save. Investor Junkie compares apps such as Betterment, Acorns, and Stash Invest that are ideal for young investors. Acorns is appealing as they do not have a minimum amount to invest and there is no charge for college students or people under age 24. This app takes your spare change from purchases made on your linked debit and credit cards and automatically invests it for you, which makes saving and investing simple and easy.
NLU offers a financial literacy tool that can help you plan budgets, ideas on how to pay down debt, and other resources to plan for your financial future. Visit nl.edu/financialaid/financialliteracy/ for more information.