Many young adults get to be responsible for themselves when they leave for college. Thus, it is inevitable for you to make financial mistakes, even if you are prepared. However, this list of 3 things college students should do with their money may help you to minimize the mistakes.
1. Start making the student loan payment
Technically, undergraduates usually have start paying their loans six months after graduating or dropping below half-time status. However, if you are able, you can make payments throughout your college years. Doing that can potentially save thousands of dollars in interest.
Moreover, if you start making payments before the grace period, there are no minimum payments. Besides, there is no penalty for prepaying. Therefore, it can help you not only lessen your debt load but get in the habit of making payments while acclimating to a budget.
Also read: 5 Money Lies Millennials Need to Stop Telling Themselves (Part 1)
2. Build your credit history
The length of time you have had access to credit is essential for your credit history. Thus, the sooner you get started, responsibly, the better your score will be.
Many banks and credit unions often offer specialized cards for college students who don’t have long credit histories. Another option, if your parents or guardians are up for it, is to become an authorized user on someone else’s card.
With a high score, later, you can secure better credit card offers. That includes home and auto loan rates. Therefore, you can save more money on interest payments.
Also read: How to Invest While Paying Student Loans
3. Start building an emergency fund
When you leave school, you’ll want options. It can be moving across the country to pursue a job, going on an extended trip or taking time to find a role you’re passionate about. They all require capital, and a fully-funded emergency fund will help make the time after graduation easier.
To do it, you can start by keeping your other expenses as low as possible.
