The moving boxes are unpacked and you’ve completed all your college checklists. Being on your own for the first time can be exciting and full of new experiences. There probably won’t be anyone over your shoulder telling you how to spend your money, so you’ll also want to make sure you’re financially ready.
Here are three ways to be prepared:
1. Create a personal budget
Without your parents there to pick up all the tabs, you’re going to be buying more stuff on your own. It will be important to know how much things cost beforehand, so you don’t overspend. Take some time to figure out the costs beyond tuition and textbooks such as lab fees, gas and food that won’t fall under your school meal plan.
Write out a tentative budget that shows how much you could spend each month. As part of the budget, set aside a little cash for an emergency savings fund. This could help pay for unexpected costs, like parking tickets or laptop repairs.
2. Choose your checking options
After you’ve written a budget, you’ll want to keep track of your money to make sure you’re following your plan. One of the easiest ways to do this is to set up a checking account that offers online banking. In doing so, you can monitor where your money is going seven days a week by reviewing your account on your smartphone or computer.
Consider top checking account perks such as debit cards with purchase rewards, and accounts with no monthly service charges or minimum balance requirements. Financial institutions like TropicalFinancial Credit Union offer products for young adults that have all these features.
When you’re just starting out, it’s easy to slip up and spend more than what’s in your account. Look for institutions with forgiveness programs that discount the first few overdraft fees each year, and don’t charge extended overdrawn balance charges.
3. Weigh the benefits of establishing credit
If you’re responsible with your money and have regular income, now could be a good time to open your first credit card and establish a positive credit history.
Apply for a card that accepts first-time borrowers and offers competitive interest rates. If you manage your account well, it will be reflected on your credit report, which could make it easier to buy a car or home in the future.
Leaving home for college, you need to know how to handle your money. By setting a budget and choosing the right financial accounts, you’ll have the tools you need to do so.
Margarette Burnette, NerdWallet
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