School’s In Session, The Check’s In The Mail: Being Financially Responsible With Your Financial Aid
It’s that time of the year again. School is back in session and it’s time for the long lines, welcome back parties, and endless hours catching up with friends. It’s such a highly anticipated time of the year, but what’s even more anticipated than the start of the school year is the financial aid check that follows not too long after.
If you’re like most students you already have plans for that check long before it even hits your account. Maybe you will treat yourself to that new wardrobe, a nice lunch, or even splurging on the spring break trip that you just can’t say no to? No judgment. We all have a hard time trying to figure out what to do with a little extra cash, which can be so tempting once it’s placed in your hands. Instead of potentially making this yet another money management mistake, let’s look at some ways in which you can actually use your refund and still be financially responsible.
First things first: Only borrow what you need.
Any money borrowed has to not only be repaid, but there will be interest tacked onto it. Keeping this in mind, if you are able to work to help contribute to eliminating expenses, definitely go that route! It may seem hard at first, but trust me, you will be thankful that you decided to do it. Remember, we’re in the middle of a student loan crisis.
Clear your debt
Use this money as an opportunity to pay off credit card debt sooner. This will ultimately help you build good credit considering that paying just your minimum will extend the time it will take to pay off the balance. And it will accrue additional interest, which means more money out of your pocket. By paying off your credit card debt sooner, you are now one step closer to a higher credit score and a flawless report.
What better way to spend money than to spend it and make it work for you?! Invest some, if not all of your refund with the possibility of it accumulating and making your earnings double, and possibly triple. Smart ways to invest your money are stocks, bonds, your 401(k) if you’ve got one, and Roth IRAs. Another way to be proactive and make your money work for you is to invest it in your future career. Whether putting it toward a business or getting some certifications out of the way. Make sure you’re not the only one working hard!
Put your money away in a savings account at a bank where you don’t have an ATM card, like an online bank. We all know that if you access to your money, there is a chance that when funds run low, you will spend it. This is why it needs to be a separate bank from where your main money lives. Stack up enough cash for an emergency fund or to have a nest egg.
Use it for school
This is of course what the funds are intended for anyway, right? Right! So, how about reusing that cash on books, an extra class or two, school materials, or even to study abroad? This provides you with an opportunity to get extra benefits out of your funds all the while still investing into your education.
What will your financial aid check go toward?