As you enter college, you’ll get plenty of advice about what you should do after graduation to make sure you lead a financially responsible life. But what about while you’re in college? You may think that taking out student loans means there’s nothing you can do to improve your financial situation as you finish your studies, but that’s not true. Follow these tips for making smart decisions while you’re in college:
1. Have one account
Research has shown that people who have a single bank account spend less than those who have two or more. This may be because it’s more difficult to track exactly how much money you are spending in a given month when you have multiple accounts. Consolidate your bank accounts for a more easily accessible record of your spending habits.
2. Avoid credit card debt
Because having a credit card is necessary building a strong credit score, make sure you completely pay off your bill each month. If you can’t trust yourself to only use your credit card for purchases that you can afford, then it may not be for you. The last thing you want to do as a college student is increase your debt load.
3. Start saving
Start saving a little each month to build up an emergency fund. Having money set aside for unforeseen expenses such as car repairs or a last-minute flight home will prevent you from using a credit card to cover those costs and sinking yourself further into debt.
You may not think you need to invest before you begin your career, but it’s never too early to start saving for retirement. Open a traditional or Roth IRA and contribute a little bit of money each month. The money you put into your IRA is tax-deductible and the interest will help it grow over the decades until you access it when you reach retirement age.