There are no guarantees about whether college campuses will be open this coming fall and for how long. But there are plenty of things you can do to get ready for whatever the fall semester brings – starting with saving money for college. Here are some tips.
Soon-to-be college freshmen have so much to think about before their first semester.
What should I major in? Which classes should I take? What will my roommates be like? Two things they’re not usually thinking about: how to save money and whether the coronavirus will disrupt their academic experience. Yet that’s exactly what this year’s incoming class must contend with.
There are no guarantees about whether campuses will be open and for how long. But there are plenty of things you can do to get ready for whatever the fall semester brings – starting with saving money for college. Here are some ways to get your finances in order.
How to save money for college
Save your graduation money
While you might be tempted to use high school graduation gifts to purchase a new smartphone or other exciting devices, you’re better off putting that money into a savings account. Leave a portion of it out to reward yourself for all your hard work, but hang onto the majority of it for school. You’ll need money for books, food and all kinds of miscellaneous expenses you may not have thought about before.
Create an emergency funds account
Speaking of savings, aim to have $500 in an emergency fund before you head to school, says Colleen Krumwiede, co-founder and CEO of Quatro Money.
A 2018 report revealed that 57% of students surveyed would find it difficult to cover a $500 crisis with cash or a credit card. That’s even more concerning now than it was two years ago, because you never know what curveballs coronavirus will throw at you.
“Make certain you have quick, easy access to these funds in [an] FDIC-insured checking or savings account in case your college sends another dreaded email telling you to leave campus in a matter of days,” Krumwiede says.
But it’s important to distinguish between regular savings and emergency savings. Your emergency fund should be for truly urgent expenses – your car breaks down, you need to fly home suddenly or you’re sick and need to pay a doctor’s bill. All your other costs should be covered by a monthly budget, perhaps one you create with your parents before move-in day.
Start an online side job
A summer job is a great way to save for college, though in-person positions will be hard to come by this year. But that shouldn’t stop you from finding ways to earn, says JoBeth Evans, a college success coach and instructor at the University of Arkansas.
“As a young high school or college student, you are tech-savvy. You were made to work virtually,” Evans says. “Corona or no corona, online is your place to shine.”
Evans suggests turning something you enjoy doing – such as playing guitar – into a source of income. You might offer online guitar lessons or develop social media followings for small businesses, she says.
Building an online client base now could sustain you through college, allowing you to develop a strong financial foundation that will serve you when you enter the working world full-time.
See related: Poll shows fewer than half of American kids get an allowance
Cut back on summer spending
Amanda Ramkissoon, personal finance blogger and owner of The Frugal Mom Guide, advises cutting costs wherever you can in the months before school.
Forego purchases like buying the latest videos games, and skip takeout in favor of eating at home. Not only will you save money, but you’ll also miss home-cooked meals while you’re at school, so enjoy them while you can.
Ramkissoon also recommends decluttering and organizing your belongings so you know which supplies you already have.
Invest in the must-haves
You’re going to have to spend some money to prep for college, so you want to make sure it’s on the right things.
Ramkissoon advises getting a reliable laptop, especially given the chance that your classes could go entirely online if there is a second wave of the pandemic. Buy dorm essentials as well, including sheets and blankets, towels and any other amenities you’ll need to move in.
But check in with your parents before you shop. They may have blankets and even unused electronics such as an old microwave or TV you can take to school, potentially saving you hundreds of dollars. Even if they’re paying for your college expenses, you can ask them to put the money they would have spent on dorm supplies into your savings account.
Open a credit card to build credit
College is a great time to begin building good credit, provided you use your cards responsibly. Look for a student credit card that includes benefits such as cash back on groceries and ride-sharing services.
But be thoughtful about what you buy on credit. Purchasing a few meals or some extra notebooks and then paying your statement in full each month is a solid way to create a history of on-time payments and good credit management.
If you can’t get a card in your own name, ask your parents whether they’d be willing to add you as an authorized user on their account. You’ll have access to their full credit line, which will boost your score. Be aware that they’ll be able to see any purchases you make, so talk about what’s allowed before you start buying.
If your parents struggle to make on-time payments, you may want to take out a secured credit card in your own name instead, because as an authorized user their late payments will show up on your credit report.
With a secured card, you have to put down a deposit, which serves as your revolving credit limit. That deposit is how much you have to spend, and you can pay it down each month, just like with a regular credit card.
See related: 4 reasons why college students need a credit card
With so many concerns ahead of your first semester at college, not to mention the general stress surrounding COVID-19, saving and budgeting may be the last things on your mind. But managing your money is one of the most important skills you can master.
Getting in the habit of saving as you embark on this new chapter will help you grow into a mature, responsible adult – and that’s what college is all about.