Money Management: Tips For Students

1. Understand finances — Students need to understand exactly where their finances stand. Regularly reviewing credit card and loan records along with their credit reports from both credit reporting agencies is a good way to understand where they stand at any given time.

2. Watch for danger signs — Negative records such as late payments and collection accounts can remain on credit reports for 6 years. Students can keep their future finances healthy by avoiding these problems from the beginning. Cell phone bills and other types of debts, even when not reported directly, can sometimes be turned over to collection agencies who may then report them to the credit reporting companies, so graduates should keep an eye out for these negative records as well.

3. Create a spending plan — Developing monthly spending plans will help students understand exactly how much they need to pay toward their debts and how much they can afford to splurge. Fairly low interest rates on student loans make it possible to place the short-term focus on paying off high interest credit card debts.

4. Prepare for emergencies — A few preparations for the worst-case scenario can help students and recent graduates avoid financial problems in an emergency. To start, they should build up enough savings to cover their expenses for 2-3 months. If they find themselves out of a job or unable to pay back their debts, graduates should immediately call their creditors and lenders to explain the situation. Federal and provincial loan programs may have debt reduction and interest relief programs that will allow borrowers to put their debts on hold temporarily.

5. Consider consolidating — Look into your loan consolidation options. Often, students who consolidate within six months of graduation or who sign up for automatic payments can save even more.