As colleges begin to resume in-person instruction, some students returning to campus will again tackle the reality of the expenses of college. An average student can spend close to $53,000 on rent, transportation, and personal expenses throughout their four-year college career — which is 12% more than the amount they spend on academic needs like tuition and books.1 And despite the uncertainty caused by the pandemic, back-to-school spending by college students continued to rise from year to year.2
As these students return to campuses and classrooms, here are some key financial tips to help them consider how to succeed financially as well as in the classroom.
Taxes
Tax season has arrived and many college students may find themselves filing for the first time. What some might not realize is the parallels between success with the filing process and success with coursework. Here are some examples:
- Doing the homework. Having materials in order prior to starting the filing forms can greatly simplify the process. This can include identifying income sources, obtaining appropriate tax documents from employers and getting the right forms to file.
- Just as you would proof a paper before submitting to your professor, proofing your taxes for errors can help to not only ensure everything is included, but also avoid issues like over- or underpaying.
Budget
As the saying goes, what gets measured gets managed. Committing to tracking income and expenses and keeping within a budget can help you more simply manage and navigate the expenses of college. Here are a few things to keep in mind as you create your budget:
- Calculate predictable income sources and expenses across a weekly, monthly and yearly basis. This can help you determine what might be coming up and help you plan for the times when you want to potentially splurge on an experience or bigger purchase.
- Be clear on needs vs wants. Clothes, entertainment, and hobbies are enjoyable, but they are expenses that you may need to reduce or cut if you have any budget gaps.
- Relook at your budget often. Whether things get off track or there’s more left over in the budget than anticipated, regularly consulting the budget can help to know when to adjust things and continue toward meeting your goals.
Credit
Having access to credit can be an important part of your financial life, and building good credit now is an investment in your not-so-distant future. Positive credit can help you secure financing for large purchases, lower interest rates, and achieve greater borrowing power. Establishing credit and knowing your credit score can not only benefit you in the short term, but also be good for long-term financial health as well.
Students have a lot of elements to navigate during their educational journeys. As they juggle majors, jobs, social circles and many other activities, it can be easy for financial literacy and health to get lost in the shuffle. However, by maintaining a simple and consistent approach to finances, these students can further set themselves up for success both in and after their college careers. CollegeSTEPS® has guidance to build personal finance skills so students can manage your money with confidence in college and life. The site has tailorable content specifically for students to help them learn how to pay for school, manage your money, build credit, and more. Head to wellsfargo.com/collegesteps to learn more.
- “College Student Spending Statistics and Facts — 2020,” Admissionsly.com, June 12, 2020.
- “Coronavirus could push back-to-school spending to record level as uncertain families gear up for at-home learning,” National Retail Federation, July 15, 2020.
