August is an exciting time for up-and-coming college freshmen! There is the anticipation of being on your own, the excitement of meeting new people, and the thrill of starting your advanced education. You’ve got a dorm room to decorate, clubs to join, and activities to schedule as you settle into your new life. One important thing to remember is that you are also going to be responsible for making your own money decisions.
Perhaps you are already used to handling your money, or your parents might have given you a good “money talk” this summer to help you learn the financial facts. But if you are still lacking these fundamental skills, here are a couple of tips to help you get “money smart” before classes begin:
• Financial aid comes with strings attached: You might not even realize it now, but the financial aid you receive from your school to help cover the cost of tuition probably comes with a few strings attached. In most cases, receiving academic financial aid such as scholarships or grants simply requires you to achieve sufficient academic progress, so be sure you know what that entails. You might be required to carry a certain number of credit hours or to obtain a particular grade point average to remain eligible. Students with special scholarships in athletics or arts might have other participation requirements. Students attending school under the ROTC program are required to engage in a certain amount of military activities. You might be required to repay any funds received if you do not meet these requirements, which will likely cause a severe financial hardship on you and your family.
• You’ll need to repay your student loans someday, so watch how you spend that money: Some students fall into the trap of thinking that their student loans are some kind of slush fund that they can use for whatever purpose they desire. While this might even be true technically, it is still crucial to keep in mind that you will be repaying those loans in the future, so you want to keep the amount borrowed as low as possible. Future self will thank you for not wasting this money on ordinary activities while loan balances and interest amounts added up.
• Don’t believe everything you hear about easy credit: Because most students don’t have a good handle on the use of credit, some colleges have limited the ability of credit card companies to make offers on-campus. But those companies might still be able to find you online or through the mail. Be very wary of anyone offering easy credit or low interest. Those rates could jump up substantially without notice. You’ll also have to make payments on credit cards every month, regardless of whether you have a job to provide any type of extra income.
Get money smart now, and make those college years easier on yourself financially!