Many students believe that they are adequate managers of their personal finances. However, good money management is more than just creating a budget and checking your bank account. Money management involves many aspects of the financial world, including your saving and spending habits. In order to be good at managing your own money, you need to create a financial plan and be able to follow through with it.
As a college student, managing your money can be extremely difficult. Between the cost of tuition, textbooks, school supplies, and room and board, your budget could be stretched pretty thinly. Additionally, students are faced with the task of choosing between getting the most out of the college experience and saving for the future. Take the quiz below to see how well you would respond in these everyday financial dilemmas.
What did you think of your results? Whether you were great at managing your money, on the right track, or needing improvement, taking this quiz was a great way to begin thinking more about your financial future. Now that you have your results, take a moment to read more about these financial dilemmas from the quiz. That way the next time someone invites you to do something or asks to borrow money, you'll know how to handle the situation.
1. Should I go out to eat and see a movie again?
Although regularly going out to fancy restaurants and movie theaters are fun ways to spend time with your friends, they’re also easy ways to spend more money on entertainment than your budget allows. If you say “yes” to every invite, your finances may begin to suffer. Instead, try suggesting budget-friendly alternatives, like choosing a more affordable place to eat out, utilizing your college meal plan, offering to cook for your friends, or hosting a movie night in your dorm. These options still allow for quality time, and you’ll save money in the process.
2. Should I get a job during college?
College is expensive, no matter who pays the bills. Even if you have supplemental help, like financial aid or a monthly allowance from your parents, it can seem like there isn’t enough money to cover all your costs. Getting a part-time job can add a little extra cushion to your budget and teach you valuable skills that can help you out later in your career. While you don’t want your job to affect your academic performance, working a few hours each week could be beneficial in reaching your financial goals during college.
3. Should I lend money to a friend?
When someone borrows money from you, you likely expect to be paid back. It’s especially difficult if you give financial assistance to a friend or family member, and they don’t return any of the money. Letting your buddies take advantage of your kindness could be detrimental to your own finances. It’s okay to say no if a friend asks to borrow some cash, especially if they have a bad repayment history. If you do decide to help, make sure to set clear boundaries and expectations with the people you’re lending to. Try sending gentle, consistent reminders and offering to set up a payment plan. You will avoid ruining your relationship by staying calm and understanding while you attempt to get your money back.
4. Should I go clothes shopping often?
While shopping is fun, buying the most fashionable clothes each week is not necessary. You shouldn’t dip into your savings account for something that could possibly be out of style in a few months. Instead of impulsively buying a sweatshirt and pair of sneakers at full price, you should wait until there’s a sale. In addition, using a budgeting app or template can help you allocate money for clothing expenses each month. Although rewarding yourself with a new clothing article on occasion can boost your self esteem, you might appreciate your new outfit more if you saved up to purchase it.
5. Should I go to a concert?
Concerts allow you to enjoy your favorite music in an unforgettable atmosphere. While they may not be a “once in a lifetime” experience, going to see your favorite artist in a city near you is still a rare and rewarding experience. Even so, if you don’t have the money to go, you shouldn’t deplete your savings or checking account. If you’re able to go, try purchasing the most affordable seating options. You will still get to hear the same music as someone on the floor at a fraction of the cost. Avoiding high-priced food and merchandise at the venue will also help ensure that you don’t overspend.
6. Should I fly somewhere warm on spring break?
After mid-term exams, you might want to relax and unwind somewhere warm on spring break. However, planning a spring break trip is an expensive feat. As a one-week vacation is not worth going into debt for, you should attempt to save money wherever possible. Because there are many popular spring break destinations, hotels and airlines may increase their prices in those locations, making it financially smart to travel somewhere else instead. You can also look for student discounts, travel with a group to split costs, or suggest driving instead of flying. While it’s great to make life-long memories in new locations, you can find affordable ways to enjoy the same experience.
7. Should I buy a new car?
Owning your own car can provide you with a sense of freedom and responsibility. You’ll be able to get to class, work, appointments, and a friend’s house whenever you want. However, you’ll also have more expenses. Not only do you have to pay for the cost of the car, but you also need to budget for routine maintenance and any repairs. While buying a car straight off the lot is impressive, it’s much more expensive upfront. Instead of purchasing a new car, you can search the internet for a reliable, used car. You will likely have a lower initial cost, but you may have more maintenance costs you need to budget for. If you’re trying to save as much money as possible, put purchasing a car on hold; you can carpool with friends, walk, or utilize public transportation.
Paying for college is the perfect opportunity to start being a good manager of your money, as the process does not happen overnight. As a student, you should properly manage your finances so you don’t feel that you are missing out on certain opportunities during your college years. College costs, credit cards, and interest rates can surprise you if you don’t plan for them. The easiest way to manage your finances is to create a budget and stick to it.
📖Have you mastered balancing budgets and homework? Check out Quiz: Should I Get a Credit Card for College?
🎓College graduation comes quickly. Check out 5 Money Moves to Make Before Graduating College.