Take A Look At These Tips To Keep Cash In Your Pocket This Semester

How the school year begins can dictate how it ends, so starting off with and maintaining the right focus is critical.
If we only consider tuition and books when budgeting for the year, it’s going to be a long 12 months of ramen noodles and grub from the local dollar store. Over at Lifehacker.com, there is an analysis that breaks down a number of hidden costs for simply heading back to college.
Even with a full scholarship, college is not a free ride. The cash money is going to go out the door faster than one can imagine.
For example, paying for the up-and-down prices for gas to get back and forth to class or to your job is critical. And parking passes and metered parking around campus must be considered. Parking is a nice revenue generator for most campuses so plan accordingly.

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An excellent alternative is public transportation, but even that can be pricey if not accurately accounted for.
Once on campus, the financial drain continues. Yes, course materials are going to cost, that pretty much goes without question. But there are other incremental costs that come along after buying books.
Labs, studios for projects and extra class materials are hidden costs that can eat away at your budget for the semester.
Since no man, or woman is an island, social activities are going to be a factor. Bars, booze and those other vices add up fast. If you’re a member of a fraternity or a sorority, be prepared for dues that range from a few hundred to a few thousand bucks.
Sporting events, eating, household items and other necessities of life quickly add up. Oh yeah. And those credit card bills for the festivals over the summer still need to be paid for.
Of course you want to look good. So where is the cash going to come from to get those new Supra Noiz sneaks or Drake’s limited-run OVO Jordans when they drop?
Kevin Gallegos of the Freedom Financial Network in Phoenix provided some sound advice to help make sense of these expenses.
“It is all too true that most schools teach little to nothing about how to manage money and avoid going into debt,” said Gallegos, VP of Operations. “Back-to-school is a great season for anyone to give themselves a refresher course on organizing their finances and managing money.”


Budget, budget, budget.

“We make this the first lesson, because it is so important,” Gallegos said. “Everyone should use a monthly budget to track spending and income,” he added. By tracking daily spending, households can learn where their money goes – and adjust as needed.

Try the envelope system.

Back-to-school shopping provides an excellent opportunity to try out the envelope system. To use it, people withdraw enough cash for a budgeted expense (such as shopping for supplies or clothes). Then divide the cash into envelopes assigned to categories – clothing, electronics, supplies, etc., for each person. When the cash for one category is gone, shopping is done. Alternatively, look for an app that tracks spending the same way.

Be over-cautious with overdraft protection.

“An overdraft protection loan – and it is a loan – can save $50 in fees each time a check might have bounced otherwise,” explained Gallegos. That can be valuable if it rarely happens, but watch out for high fees for this ‘courtesy.’” Overdraft funds usually come with high interest rates (a median of 18 percent, according to an FDIC study) and/or fees (a median $27 per occurrence). Understand that the overdraft business is big business. It nets banks $32 billion annually, the Consumer Financial Protection Bureau reports.

Save money – automatically.

One way to streamline savings and debt repayment is to automate finances as much as possible. Paychecks can be directly deposited in one or more accounts. Making savings automatic means people never forget to pay themselves first. At many institutions, direct deposit also saves on banking fees.

Make retirement planning a no-brainer.

Just as people can save automatically at the bank, they can do so with retirement accounts. “Consider retirement saving a monthly bill that is not optional,” Gallegos said. “If your employer doesn’t deduct retirement contributions automatically from your paycheck, set up an automatic transfer to an IRA or other self-funded account.” Saving for retirement is especially valuable for new graduates. Thanks to compounding interest, people who stash 10 percent of their salary starting in their 20s can save 50 percent more by retirement age than people who don’t start until their 30s.

Cut out late payments (and fees).

Paying bills late is a headache, it’s embarrassing, and it can cause tremendous expense in terms of late fees, higher interest rates and reduced credit scores. Spending a little time up-front to set up bills for automatic payment, on time, can pay off significantly. Even better: If in debt, arrange to pay more than the minimum on at least one account to get out of debt. “This system will soon feel like a non-negotiable obligation,” Gallegos added.

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