Wise Financial Moves for College Kids

Off to school? The first time away from home is an exciting time, but it’s also the first time you’ll be living on your own. Doing a little homework before you go can help make the transition to college life much easier. If you’re a student or the parents of one, here are some tips to help with managing finances, protecting personal belongings and guarding against identity theft.

Get Renters Insurance

You may not have considered how much your personal property is worth, but the cost of items like TVs, computers, smartphones and tablet devices can quickly add up. If you had to replace them, it could cost a lot. A renters insurance policy protects your belongings from perils such as fire or windstorms, vandalism and theft. If you plan on living in a dorm, you’re probably covered by your parents’ homeowners or renters insurance policy, but if you’re living off-campus in an apartment or condo, you’ll need a policy of your own.  Not only does renters insurance protect your stuff in your residence, it covers your property while you’re away. For instance, if your laptop is stolen while you’re in the school library or at a coffee shop, that loss is covered and you’ll be able to replace that device. And for the cost of a pizza—or as little as $15 a month—you’ll have peace of mind and valuable protection when you need it.

Use a Budget App

There’s nothing quite as eye-opening as finding out how much things cost when you have to pay for it yourself. With a set amount to live on each month, you’ll need to track what goes in and out of your bank account so you don’t wind up with costly overdrafts, late fees or living on beans if you blow your food allowance. Fortunately, there are plenty of apps to help you securely track your spending and save for upcoming expenses. Many mobile banking apps include budgeting tools, so you can manage your finances all in one place.Please ensure you take precautions and install only applications from trusted resources. Read GottabeMobile.com’s 10 Best Budget Apps for 2015 to find the app that’s right for you.

Build a Good Credit History

While credit cards can be a trap if you overspend, it’s important to learn how to use credit the right way. If you’re not 21, you’ll need your parents to cosign for a credit card—which means they are also responsible for any debts you incur. Or, your parents may want to consider adding you as an authorized user on their account so they can monitor your spending.  It’s important to find a card that offers a competitive interest rate and perks like cash back or rewards points. You can establish a good credit history by not maxing out your credit limit and paying the balance off each month. Avoid charging big-ticket items, unless it’s a true emergency, like a flat tire.

 Stay Secure Online

Diligence is the name of the game when you’re using the Web—and building a line of defense is crucial to keeping your finances and personal information safe. Make sure all your devices are password protected and that your anti-virus software is always kept up-to-date.  Follow your school’s security recommendations and take advantage of any free software they may offer. If you like to study in public places—like restaurants or coffee shops, make sure you never shop or bank on an unsecured network. Free Wi-Fi is nice, but not when you’re accessing your finances. It’s very easy for scammers to gain access to your bank account or credit card information. Take caution when using social media or opening emails from strangers, because sometimes these can contain malware or viruses. 5 Security Strategies for College-Bound Students provides more helpful tips.

Save on Textbooks

A big expense every college student faces is shelling out for textbooks. According to the U.S. Department of Education, college students spend approximately $1,200 a year on books and supplies. However, there are many ways to reduce costs—including renting, or buying used or digital books on sites like Chegg, Amazon or Textbooks.com. Another great option is the growing prevalence of open textbooks, which are published under an open copyright license, allowing students to download them for free or buy more affordable print copies. Sites like Open Textbook Library provide students with free access to a wide range of open source textbooks.

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Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or BALANCE counselor who can help tailor a solution for you.

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