What College Students Need To Know About Building a Financial Future


College students have difficult financial decisions to make, and are rarely prepared to make good choices. With the proper planning and information, students can leave school with strong economic sense, and a head start on the future.

Credit Card Traps:

For many, credit cards have become a part of life. When a college student hits the age of eighteen, they are showered with credit offers tailored just for them. Easy credit may be difficult to resist, but with high interest rates and low minimum payments, they quickly turn into a serious money trap—following graduates for years.

One thing to remember, credit cards are a valuable tool in creating an effective credit history, if used wisely and carefully. Paying the monthly balance is the best strategy for establishing excellent credit.

Credit Scores:

Speaking of history, college can be filled with distractions, many that will hold financial futures back. Missed payments can damage your score for seven years—a long time for someone now in college. While in school, examine your finances seriously. Students are not only learning in class, but lessons in life.

Budgets:

Not only senior citizens live on fixed incomes, and college students, especially if they are using loans and grant funds to finance their education, live on limited funds also. A budget is essential for students to learn the basics of money. It doesn’t have to be elaborate—a basic statement will do. Just as long as they understand that income is a finite resource and allocate them accordingly.

Spending Student Loan Money:

A regular influx of cash does NOT mean it is time to party! Student loans are just that—loans. Spending unwisely will cause a larger hole to climb out later on. Use them only to cover what you absolutely need, and not one cent more.

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