College years give us fond memories. They are notorious for setting the stage for the future of careers and life. They can also build the foundation for financially successful years. The college years are to the money future of a person what the childhood years are to the health and well-being of a teenager. A mistake committed persistently in the foundational years adversely affects the outcomes of an individual a decade later. Thus, taking care of credit terms and ratings in college is an excellent foundational habit that will let you enjoy prosperous relationships with financial institutions in future.
Here are four credit management tips for students
1. Start tracking your spending
Check your finances as soon as the month gets longer than your money. The cost of living can get quite high for a new college student prompting the need for credit to sustain life. However, before going for credit, you should spend the time to track your finances. If you are already on credit, then its even critical at this stage to look back at what the money did and where it went. You only get a free pass if you handled medical emergencies. Otherwise, you need to put things in order. You can do so after you understand the problem and accept it.
2. Take insurance
Most college students are unaware of the value of insurance. Life insurance, health/Medicare insurance, and property insurance such as auto insurance are life saviors. When your health or your vehicle breaks down the insurance company comes in to cover the cost, and this saves you a lot regarding out-of-pocket expenses. Try different forms of insurance quote and see what you can afford. You might be surprised that for a cost of a decent meal, you can get a one-year health or auto insurance coverage for your student needs.
3. Keep a payment journal
You need to be prompt with your payment. Getting good credit score is all about paying in time irrespective of the amount borrowed. If you are to fail on repayments, then consider it a disservice to yourself. A bad credit score exposes you to high-interest charges in future whenever you want credit. Pay any bills that are in your name in time. Cut back if you have too many bills to your name. IN some cases, reschedule with the lender or the recipient of the bills so that you pay most bills when there is money in your account. Rescheduling is a solution for avoiding bounced checks and other defaults that you might not know.
4. Use your card responsibly
Leave the card in the house for most of the time that you go out. Take it out when you are specifically going for grocery shopping and make the purchases in bulk. Keep in mind that your card gives you access to a form of overdraft that you can only use in emergencies. You do not want to have more debt than you can handle. Leaving the credit card behind is a way to improve your self-control against impulse purchases. It gives you time to think about buying something, and if you rationally know its okay, then you can always go back to the shop. Watch out for internet shopping as it can be a trap for your finances.
Follow these credit management tips for students and improve the prospects of your financial prosperity. Take care of yourself well so that you are always of sound mind when making money-sensitive decisions.