5 Easy Money Saving Money Tips for College Freshman

Starting college can be fun, hard and overwhelming all at the same time! Add finances into the mix – whether it’s the first time you’re using your own money for things, paying for school or anything else – and it can be a lot to manage.

Below, please find some tips on how to stay on track with your finances in college at TopCashback.com:

Build your credit history: In today’s world, the importance of credit can be found in almost every aspect of life. From applying for a credit card to purchasing a car, your credit score is used to determine your creditworthiness.

As a young adult, you should always be conscious of how most financial decisions affect your credit score. If you don’t already have a credit card, you should get one. Having a credit card in your name, even if you don’t buy anything, will help you establish credit and the longer you have a credit history, the better.

Look for a credit card that matches your lifestyle: When you’re a student, there are lots of student credit cards and bonuses available, so don’t sign up for the first card you see. Find a credit card that has perks relevant to you. Whether it’s a sign-up bonus, cashback that can be used for statement credit (aka continue to swipe and spend as you normally would then get free money to pay off future bills) or airline miles (if you’re trying to save up for a spring break trip with friends!).

Be mindful of your spending habits: If this is your first crack at financial freedom, don’t start charging anything and everything. Does this sound like you? Well, credit card companies can see if you are a risky borrower and can subject you to higher interest fees (AKA you’ll have to pay them more money).

Credit agencies can qualify you as being a “responsible customer” depending on how much of your credit access is available, so exceeding more than 30 percent of your credit utilization ratio is a red flag to them. Your credit utilization ratio is a measure of how much you owe on your cards compared to the limit.

While the rule of thumb is never to exceed 30 percent of your credit utilization, staying below 10 percent would be ideal to build and maintain a perfect score. Try your best to avoid impulse purchases, and when you do use your credit card, make sure you’ll be able to pay it off when the bill comes.

Take advantage of every discount and savings opportunity: Aside from learning how to manage your money, young people need to learn how to make every penny count.

Look for student discounts when making in-store and online purchases. Many retailers offer a reduced rate or promos for students only, for example, Apple gives student discounts for new computers. Research your go-to spending spots to see if they offer student discounts or save money by using a cash-back site like TopCashback.com to shop Urban Outfitters, UberEats, Textbooks.com and more.

Learn to budget: Most students get their first glimpse at financial freedom during college via part-time jobs or side hustles. It’s important to learn how to properly manage your new-found wealth so you’re never left wondering, ‘Where did my money go?’ A personal budget is key to properly put future income towards expenses, savings, and debt repayment.

A basic budgeting tool that is made for progress is the 50/20/30 rule. Spend only up to 50 percent of your after-tax income on essentials, such as housing (aka your dorm or off-campus apartment); 20 percent on financial priorities, such as debt repayments and savings; and 30 percent on lifestyle choices, such as vacations and late-night food runs with your BFF’s. Effective money management is key to living a healthy financial life and achieve financial independence.

Written by Rebecca Gramuglia, personal financial consultant.