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How to Get Your Finances in Order Before Heading to College (371 hits)

Going away to college is a milestone event that essentially ushers in your life as an independent adult. Even if you will still be somewhat reliant on your parents from a financial standpoint, you will have much more control over your finances than you have had in the past. This is a time when some young adults fall heavily in debt with student loans and credit card accounts. By taking smart steps to prepare your finances before you leave home, you can get yourself established on solid financial footing.

Prepare a Budget

Budgeting is a cornerstone of financial health, but many young adults do not prepare a budget until they have graduated college. During your college years, you likely will need to manage a car payment, auto insurance, food expenses, books, tuition and more. While you may get some assistance from student loans or parent contributions, you also may need to work at a part-time job and manage the payment of your expenses. Before you leave home, prepare a reasonable and accurate budget. This budget should be updated regularly so that it continues to be an effective tool for you to rely on.

Look for Ways to Save

With your budget in hand, you can potentially anticipate cash shortages. With this insight, you can take steps now to reduce spending. It may be wise to look for savings in recurring expenses. For example, if you have not already made plans for housing, you may seek more affordable housing arrangements. You could also shop around for auto insurance or find savings in other areas.

Find a Few Helpful Apps

Money management is challenging for adults who have been on their own for years or even decades. With your inexperience in this area as well as with your focus overwhelmingly on your studies, you need all of the help that you can get. The good news is that there are numerous apps available that can assist with savings, budgeting, receiving funds from parents and more.

Spend time reviewing the apps available, and download the right combination of apps to your phone. If you intend to use these apps interactively with your parents, make sure that the apps are functional on their smartphones before you leave home.

Open the Right Bank Accounts

If you do not already have a checking and savings account, now is the time to open up a new account. You can also analyze a current account to determine if you can save time or enjoy benefits by switching to a different type of account. Many young adults believe that fees and features for checking accounts and savings accounts are similar, but this is not true. Some accounts are designed specifically for young adults who are just starting out, and they have very affordable fees or no fees in some cases. A little research could ensure you a free checking account.

You may be anxious about many things as you prepare to leave home, but money does not need to be one of them. When you walk through these steps, you can feel confident that your financial house is in order.

Posted By: Meghan Belnap
Tuesday, September 18th 2018 at 1:49PM
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