Top Tips for the Financially Savvy Student

Posted by Rebekkah On December - 11 - 2012 0 Comment

Every year thousands of young adults take their first real steps to independence and head off to college. Unfortunately a significant number of them will encounter difficulties when it comes to managing their finances–and that’s before they even consider the amount of debt they may accrue from student loans. The prospect of their child getting into debt when they leave home is a worry for most concerned parents. Here’s our top three tips for helping your child to become a financially savvy student.

1.  Be Prepared
Like most things in life, preparation can put a student in good stead for finishing college without incurring astronomical debts. A Private College 529 Plan enables parents to save for college over a number of years with contributions starting at just $25 per month. Having savings is excellent in its own right, but the benefits of saving with a plan such as this far outweigh the value of savings alone. These plans allow parents to effectively freeze tuition costs at today’s prices; even if their child has just been born. That’s an incredibly attractive options considering the exponential rate at which tuition fees are rising. Contributions are valid for anything up to 30 years for 270 different private colleges. Should the student opt for a public college when the time comes, options such as changing the beneficiary and requesting a refund are available to ensure that the money invested is not lost.

2.  Budget Properly
Understanding finances and how much money is actually available should help students to keep their spending in line with their budget. Parents can help by sitting down with the student and going over the basics of budgeting. Any budget should start with the assessment of needs and wants. This will help students to understand the value of prioritizing their outgoing expenditure. Other tips parents can offer to their children are how to use coupons effectively and how to plan their weekly meals around available coupons. The costs and benefits to such an approach to meals should of course be balanced carefully with opting for a college meal plan. Parents may also encourage students to take advantages of the cost savings offered by renting textbooks as opposed to buying them outright. They can also chat to them about how students can team up to form a buying club that will offer all members significant discounts on everyday staple items.

3.  Make Money
It is all too easy for college students to rely on the funds provided by their scholarships, student loans, and parental contributions. Perhaps the best advice that can be given to college students looking to become financially savvy is for them to actually make some money on top of their other income streams. Students need not be distracted from their studies in order to earn money, but there is little doubt of the value offered by some form of employment. Working students, even those who just undertake work during the summer holidays, will not only benefit from the extra income, they are also well placed to benefit from the experience that only work can offer. It will look good on their resume, particularly if they can relate the work undertaken to their studies and future career.  It’s a win, win situation.

Of course, there are other great ways that the burden of student loans can be mitigated and both parents and students are advised to do their homework well in advance of the student going off to college.  Only by learning and comparing your options can you really be prepared to handle college tuition properly.

About the Author:

This article was written and provided to eFinancial Resource Center by one of our partners, Linda Forshaw. Linda is a Business Information Systems graduate from Lancaster University in the UK. Linda is a leading contributor to Degree Jungle, and she is a full time writer and blogger specializing in education, social media, and entrepreneurship. Contact her on Twitter @seelindaplay

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