Basic Financial Tips for College Students
CommunityAmerica recently opened a new location at the University of Kansas in the KU Memorial Union. In the spirit of celebrating our new space, I thought this week I would share some financial tips for college students who may be new to the world of banking, and some wisdom that parents can pass along.
Know your Accounts
There are many different account types that can be confusing when opening an account for the first time. Most financial institutions offer checking and savings accounts, but it is the benefits, fees, and limitations that you really want to pay attention to. Some banks and credit unions may charge more fees but have better cash-back offers and interest rates. Others may charge no fees, but do not offer a cash-back option, or have lower rates. These different accounts are based off of many factors - consumer needs, credit score, promotions going on at the time of the account opening, etc. It is important to know what accounts you have if you already have an account, and what’s involved with using them. For example, CommunityAmerica offers a checking account that gives you a certain percentage back each month, but you must use the debit card a certain amount of times per month to earn cash back. Regardless of what account you use, be aware of how your rewards program works, as well as associated fees, to ensure you’re getting the most out of your account and not unintentionally being penalized.
Make a Budget
Budgeting is the most important tool for keeping your finances on track. College students typically don’t start out with a significant amount of bills but building a budget will help them visualize where they stand each month. All they need to do to get started is look at what they have coming in each month, evaluate what bills must be paid, and when they are due. After finding the amount left after bills, divide whatever is left up for entertainment, groceries, and savings! Speaking from experience, it might be a little easy to get down after creating a budget because there may not be much left over at the college age, but it really is the best way to ensure all bases are covered and where additional income may be needed.
I know how expensive college life can be and how hard it is to save with the pressure of both getting a higher education and making ends meet. But building up a savings account, no matter how slow, is still an important practice. Young adults may not personally be accountable in the event of an emergency as many are still covered under parental insurance. However, savings can still be a game-changer should something happen like a needed car repair. This is where budgeting comes in handy. If they know what’s coming in and what remains after bills, building up a cushion adds up quicker than you think. Having that safety net is a huge relief when financial independence is being established. Plus, it’s a great way to establish this practice at an early age.
If your college students ever have doubts about their accounts or how they are handling their money, these basic tips can be revisited any time, or they can contact their financial institution for advice. It is their job to ensure their members or customers experience financial peace of mind at any age.
Kat’s Money Corner is posted in the Kansas City Star every week. Kat Hnatyshyn, when not blogging or caring for her little ones, is a manager with CommunityAmerica Credit Union. For more financial chatter, follow us on Twitter @CommunityAmerCU.