According to Steven B. Smith, CEO of Finicity, it is not a surprise that many students leaving home are often burdened with financial troubles. “Most common financial mistakes for many students are caused by inexperience and the lack of understanding of basic financial principles,” he says. Here are four tips and principles that will help students avoid financial problems in college.
Create a budget
Students should know how much they are able to spend in a given week or month, and use that number whenever they buy anything. Also, students should know what their necessities are and should be aware of how much those needs will subtract from the budget. “In order for the plan to work you need to measure the plan against real results,” says Smith.
Save, just in case
Students should be sure to put extra money away for a rainy day or for an emergency. They might need to travel at the last minute or might be looking for a job longer than they expected. Smith says “Be sure to have enough ‘back-up’ money in your savings account to cover that emergency.” Students will be happy they saved in the long run.
Know what everything costs
It is best to know ahead of time what everything will cost, whether it is rent, food or other needs. Being aware of the current costs will make it easier for students to budget and will help them keep track of their overall finances.
Learn how to say no
Everyone has something they want to buy. But the truth is, students can’t get everything they want, especially in college. Smith recommends waiting 30 days before buying any non-necessary purchase. “This will help you develop patience,” he says.
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