College life comes with many extra expenses--books, tuition, room and board, bills, groceries, parking, and entertainment costs--and some students turn to credit cards as a way to spend now and pay later. According to Sallie Mae's 2009 National Study of Usage Rates and Trends, undergraduates carry an average of $3,173 in credit card debt.
Use these tips to help returning students put personal finances in order:
- Make a spending plan. Know your income stream each month and align that with your spending.
- Use personal finance software or websites. Sites such as mint.com provide tools to keep you organized while you track your spending, pay bills, and take better control of your finances.
- Go easy on credit. While credit cards are an important financial tool, they are best saved for emergencies or big-ticket items, not groceries or clothing. If you must use one, try to pay off the balance at the end of the month. And pay attention to the fine print on the card you are considering.
- Keep credit healthy. You need good credit to get car loans, a mortgage, the lowest interest rates--and a job. Roughly 50% of employers now check the credit of possible hires, according to the Society for Human Resource Management (MarketWatch July 30). To keep a good score while in college, pay all bills on time, keep low balances on credit cards, regularly check accounts for unusual activity, and pay parking tickets and library fines. Also, order a free credit report from annualcreditreport.com to track your credit history and check for errors.
Visit your financial institution or credit union for help setting up accounts or for personal finance advice.