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Help Students Avoid Debt with 9 Steps

Help Students Avoid Debt with 9 Steps. Merely 40-45% of college students have taken a personal finance course, but around 70% take out student loans. This makes financial literacy all the more important to help young adults begin their professional lives. The personal finance site MoneyRates.com aims to help high school and college students develop healthy financial habits with nine steps and an expert panel weighing in with its new release 2021 Guide to Back to School Finances for College Students:

  1. Be Smart about Student Aid and Loans – Try to pay interest on student loans while in school and only use student aid for tuition and essentials.
  2. Keep Applying for Scholarships – They’re not just for seniors in high school.
  3. Compare Checking Accounts – Not all checking accounts are created equal. Research the fees and minimum balance requirements. Then young adults can monitor and track spending, which helps develop healthy money habits in the future s list of 10 of the best free checking accounts for students is included. This is a great way to avoid student debt.
  4. Save that Allowance from Adolescence – A 2019 report shows the average monthly budget for college students is $100-$300, but the USDA finds they spend $163-$367 on food each month. Make a list of anticipated expenses to help justify an allowance.
  5. Earn Money – Just five hours of work a week can help avoid racking up credit card debt. Working at a coffee shop, restaurant, online freelance gig or even babysitting for local families can help student earn money. Pro tip: apply for jobs before the semester starts and roles are filled; then enroll in direct deposit to access the money faster.
  6. Open a Savings Account – Even if students can only deposit $15 a month when they open a savings account, it helps them earn interest. Many banks offer student savings accounts with no minimum amounts or monthly maintenance fees.
  7. Create a Budget -Learning how to make a budget helps students be mindful of spending and saving, prioritize goals and prepare for emergency spending. Subtract necessary expenses from monthly income, set goals and monitor for expenditures that can be cut.
  8. Track Spending – This can expose bad spending habits and help avoid credit card debt in the future. Pro Tip: categorize the expenses to highlight areas of overspending.
  9. Use Credit Wisely – Students should try to pay off their credit card balances in full each month. It may be a good idea to only get a credit card if they’re working. Other ways to establish credit are being named on the utility bill and using direct deposit.

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