As college students head to class, it’s important that they’re armed with information about how to manage their personal finances. Nothing is more dangerous than a college student with a credit card and absolutely no knowledge about how to use it.
Just last week, Madame Noire offered lessons on how to save money while you’re in school. But taken a step further, personal money management means being prepared for the financial decisions that students have to make over the course of everyday life, some of them bigger than others. The most important financial decision students will make, possibly during the first week of school, is whether to sign up for a credit card.
Kiplinger offers a number of tips that promise to make life easier long after graduation. For instance, “stay on top of student loans.” On the topic of credit cards, the outlet suggests foregoing them all together. The magazine cites studies showing that college students typically carry a balance and often don’t know the interest rate on their card.
Fact is, many students actually do sign up for a card, in many cases because they simply need access to those funds for school expenses. Rather than swearing them off entirely, Fox Business takes a more tempered view, suggesting that students simply learn more about what they’re getting into. The site recommends looking for the best interest rates and monitoring your credit score.
But, let’s be real: There are many adults who don’t keep track of their credit score. The mere suggestion could seem overwhelming to a college student who’s juggling studies and other responsibilities, or one who’s just out on their own for the first time. The best advice is to teach the basics of responsible spending. One of Forbes’ lessons is, “If beer appears on your budget as a category in its own right, you may have bigger problems than personal finance.” Sage advice right there.
USA Today reminds us that keeping balances low and teaching kids about limits is the path to take. Be mindful of where your money is going. Know when it’s time to stop shopping, or save money for that big thing that you’ll have to buy later in the semester. It’s also a life lesson that’s useful beyond graduation.