Tips | August 26, 2010

Five tips for college students

With thousands about to start university or college – and many more already there – financial advice for students abounds.

1. Don't blow the budget Living on income from grants, loans and part time jobs can be tight, so before lectures start, sit down and set a budget. Consider using an online calculator designed especially for students – such as this one from Uniaid – that help map money coming in against money going out. Remember a handy tip from the Guardian: "When going out partying, take only the set amount of cash you're happy to spend and no plastic cards."

2. Help from the parents? Get small amounts often Parents helping out their child financially should avoid giving one lump sum to students not used to managing money, says Canada's Globe and Mail. It quotes Investor Education Fund president Tom Hamza as saying a lump sum is "always a bad idea for someone who's never controlled money. Ten thousand seems like more than it is, but $500 increments make for tighter control."

3. Beware of gimmicks When choosing a student bank account, don't be swayed by offers of free music downloads or laptop insurance, writes the BBC. It suggests looking at factors that last over time, such as how easy it is to access the bank, the size of overdraft and interest and the fees and charges. It also warns against signing up for store cards with high interest that could tempt students into unaffordable spending.

4. Job hunt from day one Nate Challen, a 2008 MBA graduate, tells Bloomberg Businessweek it's never too early to think about what you want to do after graduation. "The sooner you get an idea of what you want to do, the sooner you'll know what companies to visit or what alumni to reach out to, which clubs to join, and which classes to ace. Even before your first day you should be reaching out through your personal network to find people in the industries you're considering."

5. Plan to deal with debt Students who take on debt while at university remember: it will need to be paid. As is so often the case with personal finance, the best way to tackle it will vary depending on individual circumstances. If there is more than one loan, it might be better to consolidate all the debts into one. Meanwhile, the Independent examines the debt of 21-year-old graduate Michael Brooks, taking the interest rates of his overdraft and his student loan into account.

eZonomics team
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