Money matters: How to save money, manage your first bank account and debunk the myth of free money

Penny pinching is a great money saving tactic for college students. (Credit: kabunosekai)

Penny pinching is a great money saving tactic for college students. (Credit: kabunosekai)

Going away to college likely means that for the first time you’re dealing with money matters on your own. It’s a time to learn how to save money, manage your first bank account, pay bills and budget your cash. Learning about money is one of those required skills you have to learn by doing. First of all, you need to understand that there is no such thing as free money.

The myth of free money

Nothing is completely free. You either pay in money or you pay in time or in effort. But if you are curious about the quest for free money, check out these ideas:

  • College scholarships: Yes, you don’t have to pay them back but you will have to live up to the expectations of those who gave you the scholarship money.
  • Rewards on purchases: Sort of free but not. You have to spend first. It’s really a lure to get you to spend more. Best advice is to avoid making purchases purely to rack up points.
  • EBates: You can earn rebates for shopping online at certain sites. First you’ll have to sign up as a member or open an account. What’s in it for them? The idea is to get you to spend money.

In an August 19, 2013 post for ThePennyHoarder.com titled, “How to Get Free Money – These 16 Companies Will Give You $1,810.25,” Kyle Taylor described several free money schemes.

When talking about the cash back at Ebates.com Taylor said, “You can choose either a $10 Target, Walmart, Macy’s, or Kohl’s gift card. You need to make a $25 purchase at any of the stores on their shopping list in order to qualify for the free gift card.”

How to save money

Maybe the best way to get free money is to be smarter about how you spend the money you already have. Here are a few ideas:

  • Prepare your own meals instead of eating out: A small refrigerator and a toaster oven in your dorm room can help you save a ton on meals.
  • Share rent: Instead of expensive dorm living, find a few buddies and share an apartment near campus. Be sure to have written rules about sharing costs, having guests over and cleanup duties.
  • Shop big box:  For school supplies, go to big box stores like Target and WalMart or the Dollar stores where good deals abound.
  • Rent books: According to CengageBrain.com, you’ll save money and improve your grades by having instant access to not only books, but all related materials and study tools.

Managing your bank account

Consider the monthly service charge, overdraft fees and cash advance fees on your credit card, and the fees can quickly eat up your account balance. When choosing a bank think about these features:

  • Free checking: Often there are strings attached such as a minimum balance requirement or a limit on monthly transactions. Be sure to read all the fine print to know how your account works.
  • Accessibility: Make sure that the bank has plenty of ATMs located where you travel the most.
  • Tech tools: Set up text alerts to let you know when your balance is dangerously low. Use online banking to keep track of your spending activity and balance. Be sure to log out when you’re done and password protect your computer and phone.
  • Reconcile monthly: Every month look at your bank statement and account for any differences between the bank’s balance and what you think you have. Differences are usually the result of outstanding checks or deposits and fees that you didn’t expect or record.
  • Save for a rainy day: Start a savings account and link it to your checking account. It will give you a cushion for emergencies.

For more thoughts on using a checking account refer to Rebecca Lake’s August 29, 2013 article for SmartAsset.com titled, “Everything You Need to Know About Student Bank Accounts.”

“You can set up your account to have money automatically transferred from your checking to your savings or you can use your savings account for overdraft protection in case you’re not able to cover a purchase,” Lake said.

What are your best tips for managing your money? Tell us about them in the comments below.

1 reply
  1. James
    James says:

    Another cost is the isolation of your student from campus life, and perhaps distance from classrooms and the library. It is important to consider the impact of housing decisions on the overall college experience.

    There is another way to lesson the financial impact: many campuses have co-ops, where your student can lower the cost of room & board by helping cook and clean.

    Reply

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