Finally, it’s time to live your dream college and course! It is a new journey that awaits sound endeavours. You may be excited about your first day at university. However, are you financially ready? Yes, leaving your home and heading to a new country means responsibility.

You will be solely controlling your lifestyle and finances. It thus requires a little preparation. Understand what life at college looks like. What do you need to spend on? It gives you an idea of the amount to save.

You cannot predict the exact amount as it differs per university and accommodation. Usually, new learners take student loans to finance their education, tuition and maintenance. It is when you live at the college hostels. However, you must plan if considering a rental accommodation.

Not planning important financial aspects may land you in debt. Accumulating debt in student life may affect your basic goals. Thus, if kick-starting your new life, read ahead. The blog may help you maintain finances during your college years.

5 Ways to avoid debt in university years

The first thing to consider is university fees and expenses. Compare the costs and choose the one that goes with the budget. A family member guarantees the fee as an earning member. Thus, make sure it does not affect the lifestyle needs.

Check whether the university you want offers scholarships or grants. If not, explore the one that does. It saves you from accumulating student loan debt. Moreover, even if you need one, you can pay it off easily with scholarships. Here are other ways to kick out debt from university life:

1)      Identify the total monthly expenses

Everything may seem overwhelming and challenging at the beginning. Student life involves expenses like- rent, groceries, car repair, stationery, etc. Calculate the monthly expenses on such items. Do not forget the utilities like- gas and electricity connections. Moreover, personal wi-fi adds to the bill. Calculate the amount you incur on such things.  It will help you create a budget and stick to it. It prevents any useless expenses.

It helps to know how much you must save. Accordingly, you can demand an extra share from the guardians. Alternatively, check part-time options to finance short-term needs.

2)      Reduce credit card usage

You may be eager to seek multiple credit cards as you begin college. Credit cards are a great way to finance big-ticket purchases. It is the reason most students rely on it. They use it to finance furniture, repair, groceries and emergencies. However, claiming cash out of credit cards for emergencies proves costly. Moreover, it affects your fresh and new credit score.

Every credit card company requires one to pay the bill by the month’s end. High interest rates increase the total bill. Skipping this or delay in payments affects the costs. You pay more on credit cards. Here are some ways to use credit cards wisely in college:

• Understand the credit card terms and fees
• Compare interest rates and fetch the one with the lowest one
• Choose a credit card that meets your lifestyle requirements
• Keep the debt low by not exceeding the limit
• Make payments timely
• Avoid applying for multiple cards at once.

These tips ensure responsible credit card usage. If you want to bring the costs down further, check other options. For example- prefer unsecured loans over credit cards for emergencies. It is an affordable option than credit cards. Moreover, it provides the facility to build credit history. It improves your financial lifestyle and credit scores. You may use it for any short and medium requirements as per affordability.

3)      Open a savings account or emergency fund

A savings account may help you save a specific amount weekly or monthly.  Moreover, you earn interest yearly on the account. It increases the total amount in your savings. You can use it whenever you want to finance your needs.

However, you must have your personal account to use it. You may have a joint account, but having a personal one benefits you. It helps you get conscious of your needs. It limits unnecessary expenses and increases your savings. However, you can use it to finance critical requirements or try something else.

Most individuals create an emergency fund at the beginning of the college life. It is the sane thing to do. Unlike savings accounts, it limits withdrawal frequency and capacity. It thus allows you to save a fixed amount only for emergencies. You can use it in a dire financial crisis. For example- if you encounter an accident or serious damage.

It is the best way to fund substantial needs. Generally, one saves for 6 months straight. One is free to withdraw money after that. You can increase the payment amount if you want. It helps create a financial backup and prevents you from taking unnecessary debts.

4)      Consider at least 2 part-time incomes

College life requires you to be independent a little. You cannot survive without a basic income source. Yes, you may get a job despite being a college student. There are multiple ways to earn and boost your savings. Moreover, additional cash flow will help you finance your needs quickly. It limits your dependency on credit cards.

Check for scholarships or earning opportunities within the university. For example- earn by volunteering or participating in external sports. You can also earn by dedicating some hours to library management, etc. Secondly, explore work-from-home options. You may find many, given the age and technical accessibility. Check for part-time gigs in your area of expertise. It could be related to your college or university course.

Multiple part-time gigs create financial flexibility. Moreover, it increases the credit reliability. You may need whopping cash sometimes. Thus, choose one that helps you save enough.

5)      Avoid purchasing a car in the first year

Every student dreams of owning a car at university. It is the right age to get your hands on the steering. However, buying a car upfront is costly. You may not have a lump sum to buy directly. Instead, you can finance the car purchase.

Most car finance dealers provide the facility to split the car costs in instalments. It helps you drive the car and own it later. However, it requires a deposit that’s 10% of the car’s price. Thus, getting a car as a first-year student is challenging.

You are new to finances and hence may struggle with that. Instead, check one after 2^nd year. It grants one enough knowledge and experience in money management. It will help you borrow only what you can afford. Thus, it eliminates additional debt troubles.

Bottom line

These are some of the best ways to complete graduation without debt accumulation. Identify a budget and stick by it. It helps one focus only on the critical needs over wants. Thus, you can save more instead of instinct purchases. Besides, limit credit card usage. It prevents a financial lifestyle and helps your credit history.