By Lily Herman
Congrats on graduation! Now you’re posting on your college’s Facebook group, choosing your future roomie, and preparing for the overall transition to college. One thing that can get lost in the shuffle? Your finances. Budgeting and managing your money are a tricky business, but a few things can make your life easier at school than having your finances in order! Read our checklist to make sure you’re on track for this year.
1. Get your financial aid in order.
Unfortunately, even though you’re not in college yet, you already have to start thinking about paying your tuition. Financial aid also affects many of the other financial decisions you’ll make in college, and at the end of the day, if you aren’t receiving the appropriate amount of financial aid, you may not be able to finance your education.
Scott Hawksworth, a financial aid specialist and founder of YesCollege.com, a website about affording college, has two key pieces of advice for students heading into their freshman year of college. First, he advises you to stay on top of your disbursements, which are the financial aid awards given directly to the university (your college will then send you a letter notifying you about your tuition costs and how much the disbursements are covering).
“Knowing exactly when tuition bills will be received and payments will be due for all semesters/quarters in the upcoming year is key,” Hawksworth says. “Financial aid disbursements occur based on those dates (typically within 10 days of due dates), so staying in communication with the financial aid office or provider is a good idea.”
What can happen if you don’t get your disbursements on time? “The results can be disastrous, including even having class registrations canceled or suspended,” Hawksworth says. It isn’t a pretty situation for anyone, but such an event can be especially traumatizing for a student just entering college. To save yourself the distress, talk to your financial aid office about your specific deadlines and mark them down in a calendar. In addition, talk to your parents so they’re aware of what needs to be done to continue financing your education.
Second, Hawksworth suggests “planning ahead for next year’s financial aid applications. It may seem excessive to some, but it's never too early to start thinking about the next year. Gather materials, even run some estimations of incomes/costs for the current year in preparation for the new year's financial aid deadlines.”
The bottom line? Start early and keep tabs on all your financial aid records. “Being unprepared and rushed is how mistakes are made, and when it comes to affording college, even the smallest mistakes can have a significant impact on your expected contributions,” Hawksworth says. “Getting those financial aid applications in early is setting yourself up for success.” Keep an organized folder or binder with all of your financial aid information, important calendar events, important deadlines, and people to contact in the case of an emergency.
2. Open a bank account.
Opening a bank account is not only a great step from a financial perspective, but also from an organizational perspective. Many students hold down a job or two in college and need somewhere to put their hard-earned money, and it’s much easier and safer to have it stored away in a bank account than to have random dollar bills in the back pockets of your jeans.
However, there are a couple of points to consider before you sign up for an account. One aspect to think about is the location of your bank. Kaitlin Noe, a rising senior at the College of William and Mary, wishes she had paid more attention to bank locales. “I had already opened a bank account before college, but found that the bank I worked with was not conveniently located next to my school, and I would have little access to it,” she says.
Kaitlin also found that it was just as important to see if a bank is located in both your hometown and your college town. “After my original bank account trouble, I then signed up for a local bank that was close to school. I found a few months later upon returning home that it didn't exist outside the state of Virginia, and I am from Pennsylvania,” she says. “I recommend looking into bank locations that are both in proximity to your school and to your home before opening an account with a bank!”
Some great banks to start looking at are Chase and Bank of America, which both offer a large number of locations nationwide.
Kristin Doherty, a rising junior at Drake University, recommends seeing if you’ll have access to an ATM affiliated with your bank before opening a checking account. “If possible, choose a bank that has an ATM on campus or doesn't charge you for using another bank's ATM,” she says. “For example, at Drake, the only nearby bank and the only ATM on campus are both U.S. Bank, so I opened a U.S. Bank account the summer before my freshman year. It will save a lot of stress!”
Alyssa Howard, a rising senior and financial literacy peer educator at the University of Texas, also encourages students to think about the pros and cons of having a checking account. “It's very easy to pull out a card and swipe,” she says. “Debit cards can be better for some students because you can only spend the money you have available in your account... That said, be conscious of your spending. Using a checking account is convenient, but requires a little self-control.”
3. Open a credit card.
The idea of opening your own credit card can seem very scary and grown-up, but it can really save you if you’re in a pinch! Alexa Johnson, a rising senior at James Madison University, was extremely nervous about opening a credit card account for fear of being in debt, but she found that it was the right choice for her.
“I opened up (a credit card account) and set a manageable $500 limit,” she says. “I'm so glad I opened one up when I did. I don't know how I'd be able to manage my finances without it! For example, I pay about $100 a month in sorority dues and I always use my credit card for that because I am spending the money in my pocket on things I need right now, like food, gas, and outings.”
Credit cards also come in handy for big, academic purchases like textbooks, which can cost hundreds of dollars, and which you’ll usually need before class (and before your financial aid comes in).
Lauren Lyons Cole, a financial expert and certified financial planner, stresses the importance of moderation when it comes to dealing with your first credit card. “You should always pay the full balance every single month,” she says. “Leaving a balance on your card does not help your credit score!”
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