5 Things About Money Every Student Should Know Before College
Starting college is a transition to greater financial independence. Students should learn to make informed financial decisions, advocate for themselves, and seek assistance when needed. Developing good money habits early can set them up for financial success in the future. Here are 5 things every student should know before college:
Budgeting Skills: Knowing how to create and manage a budget is crucial for college students. They should understand their income (e.g., financial aid, part-time job earnings) and expenses (e.g., tuition, housing, food, textbooks) and learn to prioritize spending accordingly.
Student Loans: Before taking out student loans, students should understand the terms and conditions, including interest rates, repayment options, and the impact of borrowing on their future finances. They should also learn about loan forgiveness programs and strategies for minimizing loan debt.
Credit Cards: Many college students receive credit card offers, but they should understand how credit cards work, including interest rates, fees, and the importance of responsible credit card use. Know the dangers of overspending and accruing high-interest debt.
Financial Aid: Students should understand the types of financial aid available, including scholarships, grants, loans, and work-study programs. They should learn how to apply for financial aid, the implications of accepting loans, and how to maintain eligibility for aid.
Emergency Funds: Students should understand the importance of having an emergency fund to cover unexpected expenses, such as medical bills or car repairs. Even saving a small amount regularly can help build a financial safety net.