With another school year just around the corner, students are preparing to head back to classes — and some may be leaving home for the first time. While everyone can benefit from learning about money management and taking a more hands-on approach with their finances, you adults — including those just starting college — have plenty to gain by learning to be smart about money, and a lot to lose by making uninformed decisions. Here are a few tips to help you get started:
- Create a budget. Start a personal finance plan that will make it easier to boost savings and control spending. Take a sharp look at how much you spend on optional purchases, such as restaurant food and entertainment, and instead put some of the money to work for your future by saving or investing it.
- Start now.Open a savings account and regularly add to it. Pay yourself first with a percentage of every dollar you earn going to savings. The sooner you begin saving, the easier it will be to reach your financial goals, which may include buying a home, owning a business or retiring. Consider opening a separate account to save for big-ticket purchases, such as a new TV or bicycle, instead of charging them on a credit card or paying the money back over a long time with a lot of interest.
- Limit easily accessible funds.Limit the amount of money in your wallet or purse and in your checking account so you’re less likely to spend it. Only carry a credit card when you plant o use it. Also do your best to limit regular living expenses, such as food, transportation and utilities.
- Build a good credit record. As you pay your own bills and debts, you are building a credit history. In general, the better your credit history and credit score, the better your chances of borrowing money at lower interest rates.
- Keep important cards and numbers safe.Most experts suggest you carry in your wallet or purse only the plastic cards (ATM/debit, credit) you truly expect to use soon. Do NOT carry your Social Security card, and don’t leave your birth certificate or documents with your Social Security number unprotected at home, at school or anywhere else.
- Stay safe online.Banking or conducting other personal business online can be a convenient way to handle your finances, but you need to take precautions. Install and automatically update antivirus software and firewall protection on your computer. Never give your Social Security number, credit or debit card numbers, personal identification numbers or other confidential information in response to an unsolicited e-mail, text message or phone call, regardless of who the source supposedly is.
These money management tips are provided by Iowa State Bank in partnership with the Iowa Bankers Association. If you have specific questions, contact your local banker at Iowa State Bank. Iowa State Bank is an Equal Opportunity Lender. Member FDIC.