As high school seniors gear up for the exciting journey to college, one crucial aspect that often gets overlooked amid the hustle of applications and campus tours is managing finances. Mastering financial skills is essential for navigating college life successfully. Here’s a comprehensive guide to help you create a budget, understand banking options, and make smart spending choices, along with the importance of financial literacy education and resources to set you on the right path.
The first step to financial independence in college is creating a budget. A budget helps you track your income and expenses, ensuring you don’t overspend.
“In my Government class we have been working on a project where we have to budget our food expenses for college and I never knew how much money you needed to save for groceries until now,” mentions SAS Senior Dewmini Wickramarathnia, “I’m glad I can get prepared since everything is so expensive nowadays.”
The process begins by identifying all sources of income, such as part-time job earnings, allowances, scholarships, or financial aid. Next, seniors should list their expenses, categorizing them into fixed costs like tuition and rent, and variable costs like groceries and entertainment. Setting spending limits for each category based on priority and necessity is crucial.
A popular budgeting method is the 50/30/20 rule, which allocates 50% of your income to necessities, 30% to wants, and 20% to savings and debt repayment. Apps like Mint, YNAB (You Need A Budget), and PocketGuard can help you track your spending and stick to your budget.
“I definitely need to become disciplined enough to only spend money on essentials,” remarks SAS senior Karla Gomez, “because I’m so used to impulsively spending on things I sometimes don’t really need.”
Choosing the right bank account can significantly impact financial health. Checking accounts are ideal for daily transactions, and students should look for accounts with no monthly fees, student perks, and easy access to ATMs.
Savings accounts are perfect for setting aside money for emergencies or future expenses, so it’s wise to choose accounts with competitive interest rates. Credit cards can be useful for building credit, but they must be used responsibly. It’s advisable to select cards with low interest rates and no annual fees and to always pay the balance in full to avoid debt.
“I just turned 18 and my mom is planning on taking me to the bank to open an account, but to me this process is so new,” states HEA senior Sandra Martinez, “I don’t know how this works.”
On the other hand, SAS Senior Jimena Sandoval states, “I have been told before about the dangers of relying exclusively on credit cards and high interest rates, so I will definitely keep that in mind.”
