6 Money Habits for College Newbies

Your college experience is going to expose you to many new things—living on your own, establishing a schedule, learning to do your own laundry (yikes!) and managing your own finances. As an adult, you’ll undoubtedly be faced with dozens of new credit card offers, student loan opportunities and auto loan offers—which can be overwhelming.

 

Mountain America Credit Union has a few tips to start on the right path. You and your money are going to have a long relationship, and we’d like it to be a successful one.

 

If you weren’t one of the lucky ones who were taught about credit at a young age, begin learning now how credit works, how to save for your future and how to budget. Once graduation day arrives, you’ll be ready to face the world! Get on the right track with these 6 smart money habits:

 

Use credit sparingly
This is the time to begin building your credit history. Getting a credit card is a great way to do it, but only get one. For many students new to the credit game, it can be difficult to resist the urge to splurge. Be sure to shop around to get a credit card with a low rate and no annual fees. Make your money work harder for you with a rewards credit card. Keep your limit to no more than $1,000 and, for the maximum credit benefit, keep your balance at around 50% of the loan-to-value ratio.

 

Bonus tip: What about student loans? Although these loans are often necessary, try to never carry more than two years of tuition. Find ways to contribute to your tuition by working a summer job and applying for scholarships and grants. No one wants to start out his or her 20s with a daunting amount of student loan debt!

 

Learn how to budget
You may not need a formal budget right away, but it’s a great first step to learn how to think like you have a budget. Pay attention to your spending habits, where your money goes each month and set aside a certain amount of cash for fun. When that cash is gone, don’t automatically go to your credit card. It’s too easy to run up your balance and end up paying for something you can’t afford.

 

Bonus tip: Keep the lines of communication open with your parents. Their experience can help you quickly identify areas where you can improve and keep your cash flow working for you.

 

Think strategically about social media
Wondering how this figures into our money topic? Well, it connects with your future earning potential. You’re probably already on social media but, if you haven’t yet done so, join LinkedIn and start networking with professionals who are on a similar career path. Find groups, post articles and ask questions—your connections could really payoff when you begin looking for a job.

 

Bonus tip: Your freshman year is a good time to clean up your social media presence overall. Some of the posts from your younger years could hurt you down the road. Remove anything suggestive or hurtful. These days, social media is the first place potential employers go to learn more about you.

 

Start thinking about retirement savings
At this point, it may seem like retirement is a lifetime away. Well, it is—but the earlier you start saving, the less it will cost you. Yes, it’s true! Thanks to compound interest, you can contribute less and build more in interest over time when you start early. If you wait until your thirties or forties, you’ll have to contribute more per month to achieve the same nest egg.

 

Bonus tip: Start small—maybe $50 per month. It’s all about creating smart habits that will stick with you throughout your lifetime.

 

Protect yourself from fraud
The last decade has seen virus after virus and hack after hack when it comes to identity theft. Fraudsters have become smarter and schemes have gotten bigger. The best way to protect yourself is to pay attention and be smart.

 

Be diligent about checking your accounts—daily or every other day is preferred. This will alert you to fraud early and give you the best chance to shut it down before too much damage has been done.

 

Bonus tip: Don’t give your personal information to anyone. Not your boyfriend, not your boss, not your roommate—no one. Don’t do any “favors” for friends or acquaintances when it comes to cashing checks or transferring money for them.

 

Add financial topics to your study routine
Commit to learning more about money and finances. The more you understand money and how it can work for you, the more likely you are to develop good saving and spending habits throughout your life.

 

Bonus tip: It doesn’t take much. Pick any financial topic and read one article per week. Look in the business section of your local newspaper, follow a financial blogger, check your own financial institution’s website for seminars or articles or pick up a book about money strategies.

 

As a brand new college freshman, your world just got a whole lot bigger. Enjoy your college experience! But remember, keeping a clear head about your money from the start will give you a better chance of financial success later on.