Deciding Which Financial Habits To Leave and Which To Take for College

No matter if you’re staying local, crossing state lines to go to college, or if you decide to live with your parents or move into a dorm, starting college signals a massive shift in your life. While deciding on classes and which degree program is the best fit, you’re in a great position to decide which of your financial habits you should trash and which you should nurture. Doing so sets you up for financial success for years to come, rather than a series of unnecessary (and avoidable) financial hard knocks.

Cut It: Using This Month’s Paychecks To Pay Last Month’s Bills

Just because your credit card payment or rent is due at the beginning of the month doesn’t mean you should use the first month’s paycheck for those bills. Instead, factor in upcoming bills with this month’s paychecks, which is easier when the payment amount is the same each month. It can help to split bill amounts into the number of checks you receive in a month. For instance, if you get paid biweekly, save up half the total amount of your bills with one check and the rest on the second check. If you feel like you’re living paycheck to paycheck, this tip can break that cycle.

No matter if you’re staying local, crossing state lines to go to college, or if you decide to live with your parents or move into a dorm, starting college signals a massive shift in your life. While deciding on classes and which degree program is the best fit, you’re in a great position to decide which of your financial habits you should trash and which you should nurture. Doing so sets you up for financial success for years to come, rather than a series of unnecessary (and avoidable) financial hard knocks.

Cut It: Using This Month’s Paychecks To Pay Last Month’s Bills

Just because your credit card payment or rent is due at the beginning of the month doesn’t mean you should use the first month’s paycheck for those bills. Instead, factor in upcoming bills with this month’s paychecks, which is easier when the payment amount is the same each month. It can help to split bill amounts into the number of checks you receive in a month. For instance, if you get paid biweekly, save up half the total amount of your bills with one check and the rest on the second check. If you feel like you’re living paycheck to paycheck, this tip can break that cycle.

Cultivate It: Save First, Spend Later

If you don’t already, devote a specific percentage of your income to an emergency savings account (preferably an interestbearing one), putting that money back first before you spend a dime on yourself. Knowing you have money put back for a medical emergency, car trouble or any other unexpected expense brings peace of mind to your day-to-day life.

Cut It: Having More Money Going Out Than Coming In

It’s always best to earn more than you spend. Always. If every penny you make is going to bill collectors, you can very easily and very quickly feel like you’re running on a treadmill, only you aren’t even enjoying the health benefits. There’s great satisfaction in watching the money grow in your account rather than drain out every time bills are due.

Cultivate It: Separate Bill Money From Spending Money

It’s best to have more than just a checking and savings account; you should also have additional accounts for your bills and spending money. Keeping both in the same account makes it easy to accidentally spend bill money on eating out, coffee or anything else you indulge in. If you can’t set it up so that your bill payments are linked to your bill account, set up a recurring monthly reminder (or two) to transfer money from your bill account to your checking account.

Cut It: Not Using Loyalty Programs or Discount Cards

If there’s a coffee shop, grocery store or restaurant you frequent, ask about a loyalty program or discount card. Grocery stores commonly have a discount card and an online app you can combine to save a lot of money. Get into the habit of checking the app for weekly specials before grocery runs. Taking this one step further, you can also use cashback and receipt-scanning apps for actual cash or gift cards.

As for loyalty programs, you can earn points every time you visit a restaurant or store. Even if your favorite college hang-out doesn’t have one now, the owner may be willing to look into one if customers show enough interest. Also, don’t be ashamed to ask about student discounts at local businesses.

Cultivate It: Buying Used (or Renting)

Some items simply aren’t worth buying brand-new. For college students, that includes textbooks, cars, books, dishware, (some) electronics, and furniture. Consider e-books or used textbooks. Before buying a book, check its availability at the campus and public library. With a certified pre-owned car, the previous owner absorbs most of the depreciation. Check online for used dishware and furniture, and consider refurbished electronics before buying them brand-new.

Cut It: Being Afraid of Investing

It’s easier than ever to start investing, even with as little as $5. Check out investment apps like Wealthsimple, Stash and Robinhood. Investing is a great way to start saving for retirement and diversifying your savings. Plus, the younger you start, the better.

Don’t start college life with a failing grade you didn’t know you had. Life doesn’t stop teaching you about proper financial health, so make sure you never stop learning.

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