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Financial Literacy – Banking 101 For College Students

statebudgetCollege is great time to build credit, but it can also be a time where you don’t think too much about spending habits. College students are now coming out with more debt than before and if they spend without being informed, they can accumulate credit card debt. Here are a few tips to help you manage your money.

If you have a credit card or are thinking about getting one, ask yourself if you can pay off your balances on time. If you can’t, it can lead to huge amount of debt. Credits cards are useful for large purchases that you can’t afford now but you need to be able to pay it off in the future. Some banks have special offers for college students or new members so they might change in the future. Look through your bank’s policy to find out the answers to these questions:

–          Are you going to be charged for carrying a balance?

–          What’s the interest rate?

–          Is there a penalty for late payments?

–          What is the most you can spend?

Debit cards are great if you don’t want to worry about carrying around cash and interest fees. However, it’s important to keep track of your purchases and not overdraw your account. You can get charged significantly if you let your account get into the red. Set up a budget and don’t let your balance go below a certain amount, it can help you save money.

It’s also important to make a budget for your income and have a savings account. It’s important to save money for the future or have money in case of an emergency, and many banks offer savings accounts. You can transfer money between your checking account and your savings account and some banks may allow you to have a certain amount transferred into your savings every month.

Once you have an account, you may want to set up a budget to help you keep track of your spending. Check your bank account often through the bank’s website, by balancing your checkbook, by a bank teller, or even with a phone app.

Most banks have online services, so take advantage of them and keep track of how much you’re spending and how much money you have left. It’s hard to mentally keep track of all of this information, so checking your account often is a good idea. If there are any mistakes in your account, you will be able to fix them right away instead of a later date, when you may not have proof.

After deciding your needs, choose a banking option right for you. Always check your balance before big purchases to ensure you won’t be charged fees. Maintaining a bank account doesn’t have to be stressful, and once you have the basics, you can build great credit and save for the future.

About the Author: 

Today’s guest article comes from Priya Sudendra. He is a junior at the University of Colorado and a staff writer for CollegeFocus, a website dedicated to helping students deal with the challenges of college, including housing, finance, style, health, relationships, and transferring from a community college to a four-year university. You can follow CollegeFocus on Twitter and Facebook.

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