A Guide To Managing Your Finances At University And College – Advice From A Financial Coach

Managing Your Finances At University And College – Advice From A Financial Coach

Planning to go to university? At college struggling to manage your finances? Read our interview with a financial coach for some helpful tips!

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Trying to figure out how to manage your finances at university or college can seem like such a daunting task. You want to try and get the balance between having a good time, whilst hopefully putting some money away in savings.

We interviewed Dana, a financial coach, for her top tips on managing your finances at university and college. She also gave us some really great advice on investing, stocks, pensions and more!

Dana is the founder and author of www.budget-advisor.com. From a young age, a lack of money was always a constant issue in her family. Out of growing up from a family that didn’t manage money well, Dana set on a journey to be the opposite of that. She decided to create Budget-Advisor to help young adults learn the importance of budgeting and saving money early on in life. Dana is a full time student studying finance & accounting and uses her blog to write about budgeting, saving, and all things finance.

Read the interview I did with Dana on her website here: ‘Top 10 Tips For A Successful Interview’.

Table of Contents

1. How to make your student loan last?

In terms of making your loan last, it will really depend on what expenses you have. I always recommend you set up a budget, track your income against your bills and make sure you have enough money to cover your basic living expenses. To learn how to set up a budget, click here to read my guide.

If your loan is the only source of income, then you will need to treat your it as such and only put it towards the essentials. Do not spend it on anything but tuition, bills, food & living. Don’t spend it on things like clothes, going out, etc.

Try to keep your expenses as low as possible. If you can live with your family or friends for free, do it, because campus dorms are expensive. If your loan doesn’t cover everything, look to see if you can get a paid student position on campus. Many universities hire their students and it’s a great way to gain experience and make money.

2. How should you budget for going out and having fun at university?

fun pineapple party balloons

How much to budget for going out depends on the following; if you can afford to do it at all, what the activities are and how often you plan to do them. The less you go out, the more money you can save. If you don’t want to miss out on having fun, then set some money aside specifically for going out.

First, write down the top activities you like to do, how much they cost and how often you plan to do them. Then, insert that cost into your budget and label it as ‘fun money’ or ‘going out’. For example, if you plan to go out once a week with friends and buy food or drinks you will include that amount in your weekly or monthly budget.

I have been going to school for the past 3 years and can tell you, events will come up and it’s okay to go out once in a while. Everything in moderation is okay.

Try to incorporate free activities instead. A few ideas are: walking to the park, going to the library, riding a bicycle, going to the lake, etc. Going out does not have to be expensive.

3. How to build a good credit score if you are a student? Is it important?

The easiest way to build credit is to open up a simple credit card. Many banks offer cards with no annual fees if you are a college student. Using your credit card and paying it off regularly will build your credit.

The longer the account is open, the better credit you will have, so start now. If you have a student loan, it can also help build your credit score depending on the length of time the account has been open, and by paying it off regularly.

It is important to build credit because it is often looked at when you are trying to get a loan for a car or a house. Your credit score basically proves that you can pay back the money lent to you.

People with good credit scores generally prove to be good with their money. This is because they are responsible to pay off any debts and also do not buy things that they cannot afford. Keep your credit usage at 10% or less of the maximum balance available.

Pay off your debts before the due date, and do not keep a minimum balance.

4. Any tips or tricks for saving money on food?

Here are my top tips on saving money on food at university or college.

  • Set a specific amount you can afford to spend bi-weekly or monthly. Write a list of all of the food items you would need and stick to it.
  • Plan all of the meals ahead of time.
  • Try buying in bulk to avoid going to the store too often and don’t bother with expensive brands.
  • Go to grocery stores that are affordable in your area and look at the prices of everything before buying it, choose the lowest price available.
  • Buy frozen veggies or fruits, they are often very cheap and a great alternative to fresh produce.
  • If you have a roommate, split the food bill.
  • Pack all of your meals and eat from home because eating out is one of the ways that hurts a budget.
  • Avoid excessively buying things that are not essential to a well-balanced diet such as soda, sugary snacks, and alcohol.
  • Consider not buying anything that cannot be turned into a meal

5. Do you know of any good educational resources people can use to help them understand their finances better?

I learned about managing money primarily by reading books about finance. This is the most affordable way to learn, without needing to take a class on it.

 My favourite books I read were:

Quit Like A Millionaire by Kristy Shen and Bryce Leung

With these books alone, you will learn so much at an exceptionally low cost. Also, use the internet as your resource. If you have a library nearby, you can rent books for free instead, which is especially if you are a college student.

Here are some additional resources I wrote to help you get started with your finances: 

6. How to avoid credit card debt and keep in control of what you owe?

The only reason anyone has ever gone into credit card debt is because they bought something way beyond their budget. Only use your credit card for what is already in your budget. Pay it off every time you get paid and do not keep a minimum balance.

Your credit card often gives you a maximum credit, but that doesn’t mean you can go out and just buy anything. Be responsible because if you miss a payment, interest will accrue and it will be very expensive and difficult if it gets out of hand.

I have never gone into credit card debt, and I only use it for small bills that I will pay off every two weeks. If a clothing store asks you if you want to open a credit card with their store to save 10%, say no.

If you track everything you spend on your credit card in your budget, you will be very aware of how much you have left in your budget to spend and easily keep your spending in control.

7. How to set up your bank accounts correctly? What sort of structure do you recommend?

I recommend that you have the following structure:

  • A debit card for your direct deposit and incomings to be paid into
  • A savings account
  • A credit card for building credit and paying bills.

The way I structure my bills is that I pay most of them from my credit card and pay off with the money that is in my checking account. Whatever money is left over after all your expenses, you can easily transfer that money into your savings from your checking account.

You may want to look at the accounts you have right now and find out if they have annual fees. If they do, investigate other free options. Look for college and university student accounts because these generally have no fees.

Do what works best for you. If you prefer to not have a credit card, that is okay! You can pay your bills with just your checking account or with cash.

The most important thing is to make sure you stay within your budget. Turn on overdraft protection on your checking account. This will ensure your account doesn’t go into a negative balance.

8. Planning For The Future: Should young people invest in buying a house when they first move away from home? Or is it a better idea to rent?

Depending on your goals in life, you may eventually want to purchase a home or an apartment. This is completely up to you. This is a big financial decision and there are many important factors to consider before doing it.

First, you would need a down payment, typically between 20% and 30%. If it is your first home, I suggest that you look into first-time homeowner loans in your area. These loans usually have a lower down payment and work with you to get a home.

You may rent instead if you aren’t financially prepared to buy a home. Meaning, you do not have a down payment ready to go.

Buying a home is expensive, and if you just graduated from a university, you may already be in massive debt. My honest suggestion is pay off your student loans before taking on a mortgage. No one should rush to buy a home, because you might regret it and not be ready for all the expenses that come along with it.

There is no right or wrong answer here. It truly depends on your financial situation and your personal goals. Another interesting, low-cost option though is to build your own tiny home. Tiny homes are a great idea if you want to customize it yourself at a much lower cost!

9. Planning For The Future: When should you start worrying about saving for your pension?

The best rule is to start saving as early as possible. It may seem like forever until retirement, but your future self will thank you for doing it. Besides having a basic savings account, you might want to look into having a pension for long term savings.

Your pension is designed so that you or your employer contributes money into it from each paycheck so that you have funds for retirement. Check and see if your employer offers a pension plan. If not, investigate opening one up.

After setting up your budget, you will be able to calculate how much you can afford to put away in your pension. One of the biggest mistakes people make is waiting too late in life to start saving for retirement. Don’t be that person – get started on it now!

10. Planning For The Future: Do you have any advice for younger people who want to invest some of their savings?

If you are new to investing, it can seem a bit scary. But it’s quite simple! It is basically when you use your money to purchase something that will hopefully gain value in return. The most popular investments are generally stocks, ETFs, and or bonds.

Stocks tend to be riskier but can provide greater profit.

ETFs are safer than stocks because they are a basket of different securities and bonds are the safest investments with less return.

Investing is one of the greatest ways to build wealth, and the earlier you start, the greater the return you will get. My advice is that you do some more research and consider reading the books I mentioned earlier because they will talk more about this.

My next piece of advice is don’t invest before you have your debts paid off and you have excess cash.

Then you’ll need to open an investment account. I use an app to invest, in the UK the most similar version to what I use is called Free Trade. The more research you do, the better equipped you will be to get started!

Conclusion

Thank you so much to Dana for doing this interview!

I think we can conclude that when managing your finances at university or college, organisation and self-control are very important. Make sure you plan a budget then stick to it!

To get more helpful finance tips and tricks, visit Dana’s website www.budget-advisor.com and follow her on Instagram and Pinterest.

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