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Student Edition: Saving, Spending and Everything In Between

Woman reviewing financial documents

Savings accounts, student loans and building a budget – oh my! Thinking about your money – and what to do with it – may feel intimidating, but with the right tools in your pocket you can start your financial future off strong. You may be surprised at how simply making small changes in your daily habits can make a big difference in your bank account. Unsure where to start? We’ve got you covered. Here are six money moves you can make as a college student or upperclassman in high school to set yourself up for financial success.

1. It’s Never Too Early to Start Saving

Ever heard the phrase “Pay yourself first”? Well, it’s the golden rule when it comes to saving. Even with the best of intentions, if you don’t have a plan to save your money, it’s less likely to see your savings account and more likely to see that new jacket you’ve almost been lured into buying online several times. Decide for yourself how much of your funds you’re going to set aside for savings and try setting up an automatic transfer into your savings account. That way, you’re not even seeing the funds readily available for you to spend (but you are seeing your savings account grow). If you get graduation money, make sure you put a portion of it into savings before you take off for college. You never know when you may need it later! If you’re unsure just how much you should be saving, an online calculator can help you map out your savings and goal time frame.

Pro Tip: Have More than One Savings Account

When it comes to savings accounts, the more the merrier. You may be wondering, “Wait, what’s the point of having a second savings account? Why wouldn’t I just keep all my money in one place?” Think of it this way: If you have two savings accounts, one can be designated to long-term goals (like a new car) and one for short-term goals (like a deposit on your next apartment). You can make the short-term money more readily available for you to pull from, but keep your long-term account locked up pretty tight. Setting different boundaries for yourself with each account will help you develop better saving habits and stay on track with your goals.

2. Take Financial Advice With a Grain of Salt

Have you ever felt like social media can read your mind? Chances are if you’re looking for financial advice online, you’ll start to get targeted for all kinds of money tips on your favorite social media platforms. While it’s great to learn and be exposed to different ideas, double-check the credentials to make sure the information comes from a trusted source.

When in doubt, remember: You can find reliable financial information absolutely free. Certified financial institutions like Summit typically offer a wide range of resources that cover anything you may want to learn about. And if you feel like you need a bit more personalized guidance, Summit can even offer one-on-one guidance from a financial professional online or in person. Verified news publications can also serve as reliable information hubs that provide a wider lens to an issue or pull in perspectives of credible industry experts. In the end, make sure you do your research when it comes to your money (it will pay off in the end – literally)!

3. Understand Your Student Loans

Let’s face it: College is expensive. But, there are things you can do to help cushion the immediate blow to your bank account, like taking out student loans. Before you do, it’s important to understand the different types of loans and exactly how they work.

There are two types of student loans: federal and private. Federal student loans come from the federal government, and you qualify for these loans by filling out the FAFSA application. They offer income-driving repayment plans and it’s possible to qualify for loan forgiveness. If you qualify for loan forgiveness, this means you are no longer obligated to pay some or all of your loan. Working at a nonprofit, becoming a nurse or teacher or serving in the military are among just some of the ways to qualify for loan forgiveness.

Federal student loans are divided into two categories, subsidized and unsubsidized.

  • Subsidized loans:
    • Available to undergraduates with financial need
    • The amount you can borrow is determined by the school
    • Do not accrue interest at least half of the time you’re in school
    • You start paying back loans six months after you leave school
  • Unsubsidized loans:
    • Available to undergraduates and graduate students
    • No requirement to demonstrate financial need
    • School determines the amount you can borrow based on cost of attendance and other received financial aid
    • You’re responsible for paying the interest during all periods of the loan

There are a few perks to taking out a federal student loan, like a fixed interest rate or generally lower interest rates and income-driven repayment plans. Other benefits include no credit history requirement, no cosigner needed, a repayment grace period and deferment options.

But, if you’ve maxed out your federal aid, it’s time to apply for a private loan. Private loans have a one-time application process (versus reapplying every year with FASFA), flexible repayment terms and options to refinance after you’ve graduated.

With several options on the table for student loans, you may feel a bit overwhelmed – and that’s okay! Sitting down with a trusted financial expert to determine which choice is best for your financial future can help give you more peace of mind on the back end. Summit also has plenty of flexible loan payment options that can help you manage your college expenses, including private student loans with no origination fees, low interest rates and lower monthly payment options than most lenders.

4. Take Advantage of Scholarships

Scholarships are waiting to be handed out to current and future college students just like you! So, why not take a stab and apply for as many as you can? If you’re feeling a bit lost on where to find scholarships that would apply to you, check out Going Merry. It’s an online platform made to connect students to potential scholarships and grants (not to mention, it’s free). Summit offers three Board of Directors Scholarships and hosts a Project Teen Money for local high school students, so don’t forget to keep an eye out for those opportunities as you start your scholarship hunt. Applying for local scholarships, getting a head start and using another set of eyes to review your applications are all good practices to help set yourself apart from other applicants.

5. Build a Budget and Stick to It

Think about trying to drive through a new city with no GPS, road signs or road map. How would you figure out how to make it to your final destination? It would be really difficult. On the road to financial success, your budget is your road map. It will take some upfront work, but the end result will be worth it!

One thing to make sure your budget includes is an accurate list of living expenses. Do you plan on getting a meal plan? How many times a week do you think you’ll eat out at restaurants with friends? What about that game day appetizer platter you’re planning on bringing to a tailgate? These are all things to think about when building your budget. To help plan ahead, you can set aside a designated amount of money each month to cover extra things that may be easy to forget about.

Downloading a premade budget is a great start. Just plug in your corresponding totals and the budget takes into account reoccurring payments like rent, electric bills and cell phone services so you know generally what to expect when it comes to monthly expenses. Once you’ve filled out your budget, you can see how much you have left for savings and spending.

And hey, no one said sticking to a budget would be easy. So as you start out, have some patience with yourself and be ready to learn a lot.

6. Become a DIY Pro

When you move into your new college dorm or apartment, furnishing and decorating the space can start to get a bit pricey. DIY projects are a great way to learn a new skill and save money by making whatever it is you wanted instead of buying it. Not to mention, high school and college are prime times to learn a new craft or skill you can carry forward with you into your future. Have a knack for sewing? You could sew thrifted fabrics into new curtains or blankets. Consider yourself a handyman when it comes to woodworking or building furniture? That’s a skill you can tap into to refurnish some old furniture for you and your roommates, saving you the cost of buying new. Not only are DIY projects a cost-effective way to give your dorm or apartment a makeover, but they’re also a way for you to add your own personal flair and truly make the space your own.

Everyone’s journey to financial success is unique, and Summit is here to help you navigate through it. Schedule an appointment with a trusted expert for personalized guidance.