This is a guest post by Amanda Brown.
Living Expenses Add Up Quickly
For many of us, college life gives us our first taste of independence. We leave the safe nest of our family home and start to stand proudly on our own two feet. However, this newfound freedom also comes with bills, for rent, utilities, cable, the gas for our car, and the credit for our phone.
Those bills can get overwhelming, but in time you learn to budget for regular expenses. Bundling similar accounts, such as the cell phone and internet, or your gas and electricity, can also shave money off those payments.
You Can Be happy with Very Little
College life encourages you to forget the hedonism of your teens and live a more frugal existence. You might have dined on fillet steak with mom and dad, but at school you learn how to create feasts from low-cost ingredients. You enjoy DVD nights instead of heading to the cinema, and you go for a run with your friends outdoors rather than forking out for expensive gym memberships. These lessons about how to live frugally and enjoy it will serve you well if you fall on hard times as an adult.
Credit Cards Can Cost Far More than You Think
The interest-free periods and rewards schemes can be enticing, but credit card debt has a way of creeping up on you. Just 17 per cent of college students regularly pay off all their credit card debt each month. When you don’t, you might become one of the 82 per cent of students who incur finance charges every month.
A $2500 credit card balance might cost you just $50 a month if you’re meeting the minimum payments, but if your card charges 18 per cent interest it’ll take 28 years to pay that amount back. At the end of that time, you’ll have paid $5897 in interest, far more than the cost of your original balance.
Using credit cards is a great way to build a credit rating, but pay off the balance every month to avoid ever-mounting interest.
It’s Never Too Early to Invest in Your Future
College encourages you to start thinking about tomorrow. You’re laying the foundation for your career, and considering how you’ll live your life. Choosing a solid retirement plan and securing investments now can pay large dividends later. Jot down Fisher Investments address information, and get professional guidance with any questions you might have about finances for the future.
Embrace your frugal college experiences, learn from them and know the lessons you’re learning will help you become a financially savvy adult!
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