It’s official: you’re going to college! Congratulations, you’ve worked hard, and now it’s time to reap the rewards of your efforts and have some fun, right? Wrong.
While college can be exciting, it also comes with numerous financial obligations that can make paying for it tricky if you don’t know how student finance works.
This article will teach you how does student finance work so that you have a better understanding of how to manage your money as a student in college.
How Does Student Finance Work?
Step 1: Figure out your income and outgoings
Before you can manage your money, you need to know where it’s coming from and where it’s going.
Take a look at your last few bank statements and list all of your outgoings, such as rent/mortgage; loans/credit cards; food shopping; energy bills (gas/electricity); council tax; train travel; mobile phone contract etc.
Next, take a look at any financial assistance you are currently receiving (scholarships, bursaries etc.) Finally, note down any income that isn’t related to work—i.e., money received from family or friends for example or income earned through hobbies like blogging or freelance work.
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The next step is to calculate how much disposable income you have each month. The difference between your total income and total outgoings is disposable income, which is what you have left over each month after paying off your monthly bills.
This figure will help give you an idea of how much spare cash you have each month to spend on non-essential items such as new clothes or nights out with friends.
If there isn’t much spare cash, then it might be worth thinking about cutting back on some of your expenses (but try not to cut back too far!). If there is lots of spare cash, then congratulations!
You’ll be able to spend more without having to worry about whether you’re financially stable enough for a rainy day… but don’t get carried away!
Step 2: Get help from student finance if you need it
To get financial aid as a student, you will need to fill out a FAFSA (Free Application for Federal Student Aid) form.
If you are awarded financial aid, then it is your responsibility to report that information on any tax forms, and pay back any student loans.
If you do not receive enough aid to cover all of your expenses, consider finding a job while going to school. Taking on a part-time job can help supplement your income and allow you more time for studying and other activities.
Finally, make sure that if you do have any credit card debt or other high-interest loans, that they are paid off as soon as possible, so they don’t become overwhelming later on in life when they start accruing monthly fees.
Step 3: Don’t overspend
It can be easy, especially if you’ve won a scholarship or gotten some financial aid, to overspend when shopping for college gear.
It pays to remember that every dollar you spend could reduce your available financial aid dollars by $1 in need-based aid.
For example, if your family makes $40,000 a year, and you spend $4,000 on dorm decorating and other extras that aren’t required for class work or extracurricular activities, you could lose out on as much as $1,400 in need-based student loans.
Make sure to keep an eye on spending, so you don’t end up with more debt than necessary.
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Step 4: Have a back-up plan in case things go wrong
It’s important to make sure you have a back-up plan in case your first choice doesn’t work out.
For example, if you want to be a web developer, think about becoming a software engineer as well—or majoring in computer science.
Developing an array of skills is key to landing your dream job. You can also take risks by choosing schools that don’t put much weight on GPA or test scores when evaluating students, and not applying for scholarships or financial aid at all.
This can open up opportunities that might not be available otherwise. As long as you know how much money it will cost to attend college, there are many ways you can fund your education.
Step 5: Saving money can be fun
Why not have a little fun with your savings plan? Try putting some money aside in different jars (e.g., one for vacation, one for home repair).
Then use these jars as your financial motivators and make sure that every time you want to spend money, you make sure it doesn’t come out of that jar.
Before you know it, you’ll be saving up for everything from home repairs to a much-needed vacation!
Step 6: Think about getting a part-time job
Student life is expensive, and if you live on campus, it’s not hard to get into a situation where your funds just don’t cover everything.
If you find yourself in that spot, see if there are any part-time jobs you can pick up. You could work at a local restaurant or as a tutor for younger students who need help with schoolwork.
Even if it’s just one day per week, working part-time will help offset some of your costs and give you experience before you start looking for full-time employment.
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Step 7: Enjoy your student life!
There are many aspects of student life you’ll want to partake in when it comes time for you to be a college student.
That said, make sure that as you go through your coursework and take part in extracurricular activities and social events, that you’re actually enjoying them! Otherwise, what’s the point?
Don’t get so caught up in excelling academically or professionally that you forget about having fun while trying your hardest. Balance is key here; don’t burn yourself out.
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