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Forget the freshman 15 and gain this financial knowledge instead

Date posted:  9/19/16 09:00:00 AM Financial independence in college

With the summer season behind us, college students are returning to campuses. If this is your first year of college, you might be nervous about meeting friends, getting along with your roommate and doing well in class. But, there is another important matter you should consider when you make the leap from high school senior to college freshman.

Money management should be one of your top priorities during these four years. Here are some tips for keeping your finances in check during your first year at college:

Be wary of credit cards
Unfortunately, sometimes credit card companies will target young college students. Swiping plastic may seem like a great way to buy late-night study snacks and ordering pizza on the weekend, but you don't want to put your credit score in jeopardy. The University of North Carolina at Greensboro suggested putting off the application for credit cards entirely. The temptation to use money you don't have might be too great, and you may wind up with substantial financial hardships.

If you do decide to apply for a credit card, research all of your options and make sure your initial credit limit is relatively low to help you avoid overspending. And, plan for your purchases and payments in advance so you aren't caught with a late fee.

Don't deposit everything at once
Whether your parents are helping you out financially, or you had a summer job and saved for the year, it might not be the best idea to deposit a large sum of money in your checking account. U.S. News & World Report noted this can be a hazardous move.

"Too often, I have worked with [parents] who, upon dropping off their student, say, 'I've put $2,000 in your checking account for the year,'—and then that student is the most generous pizza buyer for the first month of college," said Houston Dougharty, the vice president of student affairs at Grinnell College. "[By] October, they don't have money to do laundry."

Instead, keep funds in your savings account until you need them.

Set a budget
Get in the habit of setting financial limits. Know how much you must set aside for necessities, like food, books and school supplies, and how much you can afford to spend on other expenses, like tickets to concerts and dinner out with friends.

Sit down at least once a month to adjust your budget to match any changes. For example, once winter hits, you may need to budget for necessities like  new gloves and boots.

Don't forget to save
While you might feel like you have the rest of your life to save money, it's important to cultivate good monetary habits now. In addition, if an emergency situation arises and you need access to cash quickly, you should have a healthy savings account at the ready. If you decide to get a part-time job while working, take a specific amount of money out of each paycheck and stash it in your savings account. Try to make it as automatic as possible, so you aren't tempted to spend it.

Ask for help
New to managing your finances? You don't have to do it alone. Ask a parent or guardian to help you figure out a plan. Not only will they be willing to give you a hand, he or she will likely have a few tricks up their sleeve that they've used over the years. Part of gaining financial literacy is asking questions, gaining more information and then developing a plan that works for you.

Use modern technology
Money Crashers noted you don't need to use a spreadsheet to monitor your finances anymore. With the abundance of online tools and smartphone apps, there are plenty of modern technologies that will help with money management - especially when you are a busy college student who is always on the go.

Ask about student discounts
Fortunately for you, many businesses recognize students are working with smaller budgets. Many organizations will offer special student discounts, so make sure you bring your student ID and ask about specials before making a purchase.

Be protective
Identity theft can cost you more than money. If someone accesses your personal information, it can impact your credit score a great deal, which can be harmful in the years to come. Identity theft crimes include purchasing items online using your cards or opening store credit cards without paying them off. Make sure you watch what information you give out online as well as offline, and do not leave sensitive documents where they can be vulnerable to these crimes.

Learn from mistakes 
Because you're new to financial independence, you might make a mistake or two. While you obviously want to avoid this, don't be too hard on yourself if you mess up. Instead, learn from your mistake and recognize why it happened. Just like you are developing your brain in class, you're also developing your financial literacy while on your own.

College is an exciting time in your life for many reasons. Prepare for your future independence and better ensure you're ready for the rest of your adult life by being fiscally savvy.