Planning for CollegePlanning for college as far as finances go is one of the smartest things you can do. Don’t wait until you’re headed off to school to learn how to manage money. Sit down with your parents and openly discuss financing and how to manage your money. Have a plan in place before you enter college. Be up front about which college expenses your parents will cover and which they expect you to pay. Once you've worked this out, have them set up a plan for disbursing those funds. When planning for college, understand that monthly payments typically work best. If your parents give you a large lump sum at the beginning of the semester, you may be tempted to use the entire amount in the first few months. When the money runs out, unless it’s an emergency, you won’t be able to cover the shortfall and you’ll never learn the value of living on a budget. College life is full of opportunities to spend your money. Developing a budget helps you maintain control of your money and limits your spending. Identifying your living expenses in advance can be a little tricky. For starters, think about the cost of books and school supplies, meals not covered by a meal plan, entertainment, personal care items, laundry, telephone and Internet service, cab or bus rides or car expenses, and clothes. Remember, budgets need to be flexible and probably need to be revised after the first month or two. Next, total your income and expenses. If expenses are higher than your income, you need to find ways to increase your income, perhaps by taking on a part-time job or by reducing spending.Credit cards can spell danger. With credit card companies aggressively targeting college students, credit cards can be a major pitfall. Having a credit card for emergencies and for building a credit history is not necessarily a bad idea. But for some, access to credit is an invitation to overspend. If you decide to get a credit card, be sure you understand how credit works. You should never be charging more than the amount you can comfortably afford to pay each month. Want to be on the safe side? Use a debit card for everyday expenses and reserve the credit card for true emergencies. Debit cards give you all the convenience you need but are limited to the amount of money in your bank account. It’s a good idea to open a checking account in the area where your school is located. Locate a bank that offers free or low-fee checking for students and has several convenient ATM locations. This reduces out-of-network ATM fees. Know how to balance a checkbook. It’s a tedious job, but it’s cheaper than bouncing checks. It's also important to know that out-of-state check deposits take a few days to clear. Smart spending saves dollars. Planning for college in advance can help make the transition to college life much easier.
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