Money savvy is one of the skills you need to learn through a bit of theoretic and a lot of experience. Whether you like it or not, you need to listen to your parents when they start talking to you about budgeting and money management. Listen well and follow their advice because their advice will help you a lot to not get into major debt as soon as you get your own bank account and credit card. Although advice can only make you aware of the skills needed to manage your finances, it is still something to consider especially when you start handling money on your own.

1. When you get your own bank account, you will be offered an ATM and a checking account along with it, sometimes even a credit card. Focusing on the ATM and the issuing of checks, it would be in your best interest not to make so many withdrawals and to avoid developing the habit of writing checks all the time. These services, believe or not, are not free; banks charge you a fee for each withdrawal and check you issue. You had better learn how to track your expenses because debit spending will not be regularized by the bank even if you have insufficient funds in your account; they will just surprise you with an enormous fee.

2. Read the fine print that comes with your approved credit card. Credit card issuers will blind you with so many promotions and offers you might forget to ask how long the promos will last and the reasons these perks could be waived. For example, 0% interest on credit may only last from six months to a year and if you have one delayed payment, this can be revoked all together. As much as possible, get your parent’s advice on the credit card offers you receive. Learn to compare interest rates and annual rates before your sign up for any plastic. If possible, get a credit card with no annual rates. And always pay your credit card bills on time; you will be surprised at how interests compound on your debts if you miss payments.

3. Always spend within reason and keep tabs on all your expenditures. Budgeting is a normal activity that all people should do, especially a green horn like you. If you do not want to carry cash around and prefer to use a credit card for your food purchases, gas, and other bills, you can do this but only to the limit that your cash can offer. Try not to have more than a couple of credit cards with you and keep receipts for your purchases.

4. Design your lifestyle based on the means you have. It would be very nice if you can get part time jobs instead of depending on your parents for everything. A part time job not only allows you to shoulder some of the expenses you have but can also educate you in how to handle the income your hard work generates.

See: Student credit card

Tags: student credit cards

This entry was posted on Wednesday, October 29th, 2008 at 7:31 pm and is filed under Allowance, Budget, Student Finances. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.