Free At Last …

You’ve just graduated from high school and are getting ready to head to college. Finally there is freedom to do whatever you want.
Without a doubt when you go off to college you will have a lot more freedom than in high school. Parents hope all the important things they tried to teach, or that they hope got through, to prepare you for this new stage of life will have taken root in your mind.

Do you know what’s necessary to be financially safe and successful in this new stage of life? For some, college will be your first experience with a level of financial independence and financial responsibilities and with having a checking account, a debit card or a credit card. Others already have some experience in those areas. The following items should help you and your parents keep things in order financially and help make the new freedom a good experience.

Manage your checkbook – Only what goes into a checking account can come out as spending. So balance the checkbook every month in order to identify mistakes or forgotten transactions. The monthly bank statement may be missing items or transactions that have not cleared the bank yet. That money has been spent, so don’t look at is available for use just because the statement is not up to date.

Make a budget – Create a budget by tracking all spending for a full semester. Lots of new spending will be done and some of it will occur every semester – books, food, rent, etc. A budget will enable you to know where your money goes and to meet each semester’s obligations.

Treat plastic properly – Credit card debt is one of the most prevalent problems for college students due to not paying off credit card balances each month. This can be a problem for both the student and the parent if the parent is the account holder or a joint account holder. Some simple safeguards: keep the credit card limit low, use a credit card for emergencies only and use cash or a debit card instead so that only funds that are actually available are spent.

Renter’s insurance – Protecting your personal possessions is very important. If you will be living in a dorm, your parents’ homeowner’s insurance will most likely provide some level of coverage for your personal possessions. (Parents, talk to your insurance agent about the coverage provided by your policy.) The better alternative, especially if you will be living in non-dormitory housing, is a renter’s insurance policy. You will have coverage for personal possessions as well as some amount of liability coverage. Liability coverage is important if something happens to someone visiting you at your residence. Renter’s insurance is fairly inexpensive.

Have an emergency fund – If you are on a “fixed income” from parents, scholarships or stipends save some money each month for true emergencies.

Don’t be impulsive – Now that you may have readily available cash under your control, think before you spend. Part of personal financial responsibility is to make good decisions and good choices.

Don’t be a victim – Be sensible with your stuff and about what goes on around you. Don’t get taken advantage of. Protect yourself against identity theft.

Don’t be a lender – Have a personal policy of not lending money to other students. If you do lend someone money, do so expecting that you won’t get it back. That mindset may help in making good decisions about lending. If a “friend” keeps asking to borrow money, clearly there is a problem.

I trust your new freedom will be a good experience.

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