What Types of Income and Expenses Do College Students Typically Have?
College students typically encounter a range of income and expenses during their academic journey. Here is a concise overview of these various financial aspects:
Income
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Total Income: This encompasses all the financial resources available to a college student. It includes initial funds brought to school, such as money from family members, financial aid in the form of grants and loans, and any refunds received from the financial aid office. Additionally, it encompasses earnings from part-time jobs or other sources of income.
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Monthly Income: This refers to the recurring funds that a student receives on a monthly basis. It primarily includes income earned from part-time jobs, work-study programs, or other regular sources of financial support.
Expenses
- Fixed Expenses: These are essential costs that remain constant each month.
Examples include:- Tuition and fees
- Rent or housing costs
- Insurance premiums (health, car, renters)
- Loan repayments (if applicable)
- Public transportation passes (if used regularly)
- Internet and phone bills
- Variable Expenses: These are expenses that can fluctuate from month to month and may include both necessities and discretionary spending:
- Groceries
- Utilities (electricity, water, gas)
- Transportation (gasoline, rideshares)
- Textbooks and academic supplies
- Dining out and entertainment
- Personal care items
- Clothing and shopping
- Miscellaneous expenses
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Emergency Fund: Many college students maintain an emergency fund, which is a reserved amount of money set aside to cover unexpected or emergency situations. This fund can help mitigate the financial impact of unforeseen events like medical bills, car repairs, or sudden travel expenses. Students often keep their emergency funds in a savings account or other easily accessible financial instrument.
Overall, managing income and expenses is a critical aspect of a college student's financial journey. Developing budgeting skills and financial literacy can help students make informed decisions about their finances and ensure they meet their academic and personal goals while maintaining financial stability.
Curate a list of known scholarship options and maintain an active list: Links to AACTUS, Hardship, Institutional Scholarships, etc.
Ways to Save Money
- Budgeting: Create a monthly budget to track your income and expenses. This will help you manage your finances effectively and avoid overspending.
- Cook at Home: Preparing your meals at home is often more cost-effective than eating out or ordering takeout regularly. Consider meal planning and cooking with friends to save even more.
- Used Textbooks: Look for used textbooks or digital versions to save on the high cost of new textbooks. You can also explore textbook rental options.
- Public Transportation: Use public transportation, bike, or walk instead of owning a car if possible. Car ownership comes with expenses like insurance, fuel, and maintenance.
- Student Discounts: Take advantage of student discounts for transportation, entertainment, and shopping. Many businesses offer discounts to students with a valid ID.
- Roommate(s): Sharing living expenses with roommates can significantly reduce housing costs, including rent, utilities, and groceries.
- Free Campus Resources: Utilize free resources on campus, such as the library, fitness facilities, tutoring services, and academic support.
- Part-Time Work: Consider part-time jobs on or off-campus to supplement your income. Look for positions that offer flexible hours to accommodate your class schedule.
- Limit Credit Card Usage: Be cautious with credit card usage to avoid accumulating debt. Only use credit cards for necessary expenses, and pay off the balance in full each month to avoid interest charges.
- Entertainment Alternatives: Seek out low-cost or free entertainment options, such as campus events, outdoor activities, and student clubs and organizations.
10 ways college students can boost good credit
- Become an Authorized User: If possible, become an authorized user on a parent's credit card account. This can help you establish a credit history, as their positive payment history can reflect on your credit report.
- Open Your Own Credit Card: Once you're eligible, consider opening your own credit card account. Choose one with terms suitable for students, such as a low credit limit and no annual fees.
- Select the Right Credit Card: Research and select a credit card that aligns with your financial needs and goals. Look for features like cashback rewards or low-interest rates.
- Use Credit Responsibly: Use your credit card for occasional, small purchases, and ensure you can pay off the balance in full each month.
- Avoid Big-Ticket Purchases: Reserve credit card usage for emergencies or planned, essential expenses. Avoid using credit for large purchases that you cannot immediately afford.
- Timely Payments: Pay your credit card bill on time to establish a positive payment history, which is crucial for building good credit.
- Punctual Bill Payments: Beyond credit cards, pay all your other bills (rent, utilities, phone, etc.) on time, as late payments can negatively impact your credit score.
- Avoid Co-Signing: Be cautious about co-signing for friends or others, as it makes you equally responsible for their debts and can affect your credit.
- Avoid Multiple Credit Card Applications: Applying for several credit cards at once can result in multiple hard inquiries on your credit report, potentially lowering your credit score. Apply strategically and only for cards you genuinely need.
- Student Loan Responsibility: If you have student loans, use them exclusively for education-related expenses. Make timely payments to build a positive credit history and avoid default.
By following these money-saving strategies and responsible credit practices, college students can build a strong financial foundation and establish good credit for their future financial endeavors.
Information about Credit Score
| Credit Score | Rating | Impact |
| 601-660 | Fair | Applicants may be approved for credit but likely not at competitive rates. |
| 661-780 | Good | Applicants likely to be approved for credit at competitive rates. |
| 781-850 | Excellent | Applicants most likely to receive the best rates and most favorable terms on credit accounts. |
How to Keep an Eye on Your Credit
- You can get 1 free credit report from each of the 3 national credit bureaus each year.
- You can request a copy of your report by going to annualcreditreport.com or by contacting each of the credit bureaus individually:
- Equifax
- Experian
- Transunion