Living on a Budget

Students must reapply for financial aid every year. That means filling out a new FAFSA, too. But after the first time around, the application process seems much easier.

The greater challenge for students is handling the extra squeeze on their budgets that being a student can cause—and not racking up unnecessary debt.

This is a dangerous time in the life of a borrower, and students truly need help. Spending wisely when students are in school and resisting the urge to run up credit card debt will keep them on the path to financial success.

Creating a Revised Budget

ASA advises that students sit down and draw up a budget based on their new financial situations. For example, students may need to take the following factors into consideration:

• – Less income due to working part time instead of full time to accommodate their class schedule. Reduced overtime hours can also affect their income.
• – Increased child care or elder care costs due to the time students are in classes instead of at home. Students should check to see if their health care provides any elder care coverage, or if their school offers child care resources. Another option is to arrange child care or elder care agreements with fellow adult learners.
• – Increased commuting costs to get to campus.
• – Increased technology costs such as computing costs.

Once students have created a realistic budget, it’s important that they stick to it!

Avoiding Credit Card Misuse

Another temptation is the misuse of credit cards. While students may find it necessary to charge books or other essentials, their behavior turns dangerous when they begin buying clothing or eating out courtesy of the cards. Students need to be reminded that:

• – A $5 latte can easily end up costing $20 with the addition of interest and fees.
• – Carrying a balance, and charging up several cards at once, hurts students’ credit scores and affects their ability to buy houses and cars.
• – The burden of credit card debt can make the success of graduation taste a lot less sweet.

Living sensibly while they’re in school will make students thankful when they reach the next phase—repayment.

researching > applying > budgeting > repaying