College is an exciting time. For many young adults, it is the first time experiencing true independence, exploring a new place, and embarking on a journey of self-discovery. However, college life can also be stressful, intimidating, and lonely. Adjusting to college life can be an uncomfortable transition for several reasons, but especially when money becomes an issue. Many students find themselves struggling to balance their financial situation without their parent’s help, or having a hard time working enough hours to meet basic needs while also going to school. Financial stress in college can contribute to deteriorating mental health, poor choices, and academic hardship. Learning money management skills is essential for every young adult, and can be a critical factor in determining your long-term success in college and beyond.
Write it Down
One of the first and most essential steps in money management is creating a budget and writing it down. Budgeting means gathering your monthly expenses, accounting for whatever money you have coming in from parental support, work, or financial aid, and determining how you will allocate your money each month. Make sure to separate your necessary expenses such as groceries and rent from your “wants,” such as eating out and social events. While it is important to take time for fun and leisure as well, you need to make sure you are covering the necessities first.
Look for College Accounts
Banks and credit unions tend to offer checking, savings, and loan products, especially for college students. These services tend to come with perks such as fee waivers and lower interest rates. Start by finding a college checking and savings package where you can begin to manage your money without acquiring monthly fees. It is also a good idea to choose a financial institution that has a branch near your school, as well as ATMs conveniently located on or near campus.
Be Cautious with Credit
For many students, college is the first time you are old enough to apply for credit cards, and perhaps the first time you begin to feel like you need the extra spending money. Credit cards can be an excellent option for purchasing textbooks, gas, and other necessary expenses. Many credit cards come with rewards that can help you earn cashback, and having one or two credit products at a young age can help you establish the good credit you will need in the future. However, using credit can be a very slippery slope, especially if you know you are prone to overspending or late payments. Credit cards offered to young adults often come with very high-interest rates, meaning that if you don’t pay off your balance right away, you will be losing money in the long-run. Additionally, racking up a balance without knowing that you will be able to meet the monthly payments can destroy your credit, often causing damage that takes years to repair. Only accept one or two credit card offers, and if you don’t trust yourself to make the payments, or you aren’t confident that your income will stay the same, refrain from using them until you are more secure.
Use Your Resources
Many students need to accept financial aid in the form of grants, scholarships, and student loans to attend college. For these individuals, the financial aid office is your greatest resource. Ask a counselor to walk you through the process and help you to understand all your options before accepting financial aid. Make sure you have a clear understanding of what your student loan debt will look like upon graduating and make a plan for paying it back so that you don’t spend the next few years stressing under the weight of your student loans. Additionally, check to see if your school provides courses, seminars, or counselors that help you to learn money management skills. Taking advantage of these resources can help you to become financially savvy, eliminating the stress of bills and budgeting by giving you a handle on it all.
Check-in on Your Mental Health
Money is a cause of stress for almost everyone, not just college students. Becoming overwhelmed by your financial situation can lead to anxiety and depression, which in turn can make it more challenging to make smart financial decisions or become more organized. Taking care of your mental health is an important aspect of financial wellbeing, just as managing your money helps to improve your mental health. Additionally, some people create unhealthy spending habits as a coping mechanism when life becomes stressful or complicated, so it is vital to be aware of how you are choosing to process the additional stress of college life.
Many college students who struggle with money issues turn to drugs or alcohol to manage their stress or attempt to forget their problems for a while. Unfortunately, this behavior ultimately worsens financial situations and may lead to addiction. If you believe you or someone you love is struggling with addiction, now is the time to reach out for help. At Burning Tree West, you will find a team of compassionate, knowledgeable professionals who specialize in helping young adults struggling with addiction and their families. Here, our clients tackle their addictions head-on and harness the power to restructure their lives in a way that fosters lasting sobriety. We believe that practicing recovery doesn’t have to mean an end to educational or career goals, but instead can become a fundamental part of a successful and fulfilling life. For more information on how we can help, call us now at 972-962-7374.