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Financial Fact - Financial Planning 101 for Starting a New School Year

Back to school is also a perfect time to review your education budget books to help make your child's higher education experience more enjoyable.

 

As the new school year approaches, college students anticipate fresh starts -- new classes, new semesters, new campus activities and more. At the same time, university students also have a fresh opportunity to review and improve their financial strategies. Effective financial planning ensures a successful academic journey without excessive financial stress. If you're the parent of a college student looking to share financial guidance with your child, here are some crucial tips to help college students begin the school year on the right financial track.

  1. Review and Adjust your Budget

Before the new semester begins, suggest your child take a moment to review their previous budget and assess its effectiveness. Identify areas where they overspent or could have saved more and consider course corrections. Use this analysis to create a new budget for the upcoming year, factoring in tuition, housing, textbooks, transportation, food and other essential expenses.1

  1. Take Advantage of Student Discounts

One of the perks of being a college student is access to a wide range of student discounts. Many retailers, restaurants, and entertainment venues offer special deals for students. Students should always carry their student ID and explore available discounts to save money on everyday expenses.

  1. Maximize Financial Aid Opportunities

Ensure your child has applied for all available financial aid options, including grants, scholarships, and work-study programs. Financial aid can significantly reduce the burden of tuition and other expenses, allowing students to focus on their studies without undue financial worry. They should consult with a financial planner to avoid taking on more debt than they can handle.

  1. Consider Internships or Part-time Work

While academics are a priority, your child may want to consider pursuing internships or part-time work during the school year. Internships not only provide valuable work experience but can also offer financial compensation or academic credit. A part-time job can also help cover living expenses and reduce reliance on student loans.2

  1. Open a Savings Account

Starting a new school year is a great time for your child to open a dedicated savings account. Suggest that they aim to save some of their earnings, financial aid refunds or monetary gifts from family members. A savings account can serve as an emergency fund and help your child reach their financial goals faster.

  1. Be Mindful of Credit Card Usage

If your child has a credit card, it can be tempting to spend freely without thinking about their overall budget.  They may want to be prudent and use credit responsibly to avoid unnecessary debt. Credit cards can be beneficial for building credit, but they should not be used as a primary funding source for college expenses. We recommend students pay off their balances each month whenever possible to avoid high-interest charges and maintain a positive credit history.

  1. Explore Free or Low-Cost Campus Activities

College campuses often offer a wide range of free or low-cost activities for students. From on-campus events to student organization gatherings, these activities can provide entertainment and social opportunities without straining your child's budget.

Students may want to check their libraries to borrow free books, music and movies and save on entertainment. Local community newspapers or websites are a resource for finding free or low-cost events.

  1. Reduce Textbook Costs

Textbooks can be a significant expense. Students may want to consider renting textbooks, buying used copies, or exploring digital versions to reduce costs. Additionally, your child can check the library for copies of required textbooks they can borrow for short periods.

  1. Avoid Impulse Purchases

It's a good idea for students to practice disciplined spending and avoid off-the-cuff purchases. Before making a non-essential purchase, they may want to give themselves some time to think it over. Often, people find that the impulse to buy passes, and they can save money for more critical expenses.

  1. Seek Financial Advice

If your child is unsure about managing their finances or encounters financial challenges, they shouldn't hesitate to seek advice from a college financial planner. More and more colleges provide financial counseling services to help students manage expenses. They can offer tailored guidance so students can make informed decisions. If you're looking for guidance on saving for your child's college expenses, remember, the services of MMBB’s financial planning specialists are available to members at no cost.

Starting a new school year with a well-thought-out financial plan will set your child on the path to a 4.0 in their finances. By implementing strategies and staying mindful of spending, your child can enjoy their college experience while maintaining financial stability.

1.https://www.collegiateparent.com/money/preparing-for-next-years-college-expenses/

2. https://massmutual.everfi-next.net/student/dashboard/mass-mutual-future-smart/massmutual-financing-higher-education/1790?utm_source=google&utm_medium=cpc&utm_campaign=FM+-+MassMutual+-+College+Planning&show=registration&cq_org=google-to-microsite#budget-hacks-for-college/how-can-i-earn-money-as-a-student/page-1

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