Ready For College or University Cards, Are You?Posted June 10, 2013 in Credit Card Tips, Personal Finance
June is the time when a plethora of high school students officially make the transition from teen to young adult. As a graduating senior, on your way to university, this is a very exciting and liberating moment in your journey of life. As you put on the unflattering cap and gown and prepare for the long winded high school graduation ceremony, you’ll reflect back on those four long years of high school. It will seem like decades ago when you were that scrawny incoming freshman. Now, look at you – you’re the cool graduating senior, headed off to college, where you’ll continue to master the art of balancing your social life & schoolwork.
Soon, you’ll be all on your own. No one to tell you what to do and when to do it. There’s no reason to stress; you’ve learned how to boil water, wash your own laundry and operate a motorized vehicle. You even know how to replace a button or patch a hole in a wall. You’re ready for complete independence. Or are you?
“Ready are you? What know you of ready?”
At your age there’s no doubt you are capable of living on your own and taking care of yourself. But, unfortunately there’s more to living without mom and dad than doing your own laundry and microwaving a frozen dinner. One of the most important, yet underestimated aspects of being an adult is managing your finances. You may be ready to handle life’s everyday necessities, but do you know how to pay bills, track your spending, and save for your future?
“Look To The Future, The Horizon”
Becoming an adult – and managing your finances – starts with responsibility. The faster you learn to be responsible with your money, the better off you will be in the future. Unfortunately, I didn’t understand the importance of financial responsibility when I moved away from home. While at University, I signed up for a credit card – just for the free t-shirt – didn’t have any idea about a budget, and spent way more than I had coming in. Once I graduated and was really out in the real world, I had to come to terms with my lack of financial discipline & my outstanding credit card balance. I was so focused living in the now, enjoying my new found freedom, that I overlooked how my irresponsibility & poor financial choices were affecting my future.
Looking back I wish I had some sort of Financial Jedi Master, that would have passed down important life lessons to help me avoid the dark side of financial independence. Unfortunately, I had to fly solo and learn the hard way. Luckily, if you keep reading you won’t have to make the same mistakes…
“Control. Control. You Must Learn Control.”
To be an adult is to demonstrate responsibility and control. The first, and most important step towards being responsible and in control of your finances is setting up a budget. I know, I know, it doesn’t sounds as much fun as decorating your new apartment or signing up for your school’s social clubs, but believe me, it is imperative!
First Unpack Your Boxes, Then Set A Budget
- Say goodbye to Mom & Dad, unpack, get settled…then immediately set a budget!
- Figure out how much money you will have each month – whether it’s coming from a part-time job, mom & dad’s monthly allowance, or if you were lucky enough – your full ride scholarship.
- Then subtract your monthly expenses, such as books, rent, gas and beer money.
- Set a monthly budget for each area of spending: $100/mo for Entertainment, $80/mo for Cellphone, etc.
- Constantly track your spending – make sure you’re not going over your set budget
- Use software or LearnVest’s smartphone app to help you keep control of your spending
Then, Start Building Credit
Once you’re successfully living within your budget, and have proven you can spend responsibly, you’ll want to start building your credit profile. The best way to do that is by using a credit card. Apply for student or university cards and use it to pay for your monthly expenses. Remember though, your credit profile, or credit history, is like your shadow on a sunny day; it will always follow you now matter where, or how fast, you run. So, don’t be late on payments (no, really – don’t) and be sure to pay off the balance each and every month.
If you have a hard time remembering your credit card payment’s due date, set up automatic transfers through your bank or online account. This will ensure timely payments, which is a big factor in determining your eternal credit score. Also, don’t make the mistake of paying the minimum balance one month, thinking you’ll take care of the whole thing next month. It rarely works that way, trust me. You’ll end up paying interest on the balance and will most likely start a new bad habit of carrying over a balance every month, which quickly leads to an overwhelming & insurmountable credit card balance.
“The Deepest Commitment, The Most Serious Mind”
Being independent and financially responsible takes focus and commitment. You will need to set aside time in your busy university schedule to manage your money and pay bills. Set an alarm in your smartphone to remind you or take a break from studying at the library to check your accounts online. Once you master a budget and control the force within credit cards, you’ll find the path towards adulthood, and an even greater, more fulfilling sense of independence.