personal financeIf you're like most college students, you think a lot about finances, but aren't too adept at managing them. With the help of Joseph Groebl, wealth advisor for V Wealth Management LLC, here's a list of the top 10 things that will help you develop money smart practices and habits. In the following weeks, I will delve deeper into some of these topics.

1. Set a Budget

This is the most basic step. Your goal is to balance how much comes into your account (income, loans, etc.) with how much goes out. Add up your monthly expenses (groceries, transportation, rent, bills) then allocate a little bit of spending money. "You don't make mistakes when you budget," said Groebl. Try this budget worksheet to get started.


2. Track Spending

Do this for a few weeks and see how you are really using your money. Prepare to be surprised. Resources like www.mint.com will do this for you – pie charts and all. When you realize 60% of your monthly spending is on dining out, it might be time to go to the grocery store.


3. Live Within Your Means

You are in college. Act like it. "Don't go to the store, avoid it like the plague!" said Groebl. "Focus on saving – we are in hard times." Just because you are away from your parents doesn't mean you should buy all the things they wouldn't. Practice self control, shop for your basic needs, shop sales, and remember it will never hurt to have a little extra money in the end.


4. List Goals

A Harvard study found that 3% of their MBAs made 10 times as much as the other 97% combined. What were they doing differently? Writing down their goals. Experts in goal setting advise making them SMART, that is specific, measurable, attainable, realistic and timely. Being rich some day is not a SMART goal. Saving the amount needed to fund a summer abroad program by next summer is. Whether your goal is saving towards a big purchase or paying down debt, Groebl suggests posting it in a place that you will look at every day.


5. Reduce Debt

Before you are in a position to start building wealth, you must first get your debt to zero. Don't take out loans beyond educational and living expenses. Don't carry a high balance on your credit card. "Reduce to the ridiculous," said Groebl. "Keep things simple for goodness sake."


6. Respect Credit Cards

"It is easy to bash credit cards," said Groebl. "They are great--but they have to be respected." Read the terms and understand your rates. You have to play by their rules. You must have the discipline to maintain a zero balance, so never make huge purchases with the mindset you will pay it off over 6 months.


7. Never Be Late on a Payment

Whether it is loan payback or credit card balances, always pay on time or else you will quickly annihilate your credit score and be hit with high, resource draining late fees. If you do not have the money, call the company before your payment is considered late. "They will make arrangements with you" said Groebl.

8. Start an Emergency Fund

It is smart to have three months of living expenses put away for that unexpected big expense. If you have trouble saving money, set up a portion of your paycheck to be directly deposited into a savings account. Even though interest rates are low these days, keeping your money in an interest bearing savings account or short-term CD keeps your money working for you. Make this account accessible enough that you can access it when necessary, but not so much that you can tap into it when you want a new TV.


9. Practice Smart Saving

There are tons of resources with advice on how to pinch pennies here and there. Here's a link to 118 of them from CollegeScholarships.org. Once you have mastered these techniques, reward yourself every now and then.


10. Seek Scholarships, Not Loans

With the high price of tuition, loans are often an inevitable reality of college life. Make sure you understand the terms of the loans and pay them off in a timely manner. However, even better than loans are scholarships--which are available from countless sources, and sometimes for odd reasons. Do some research and apply for as many as you qualify for.

Sarah Smith is a junior at Loyola University Chicago majoring in international studies and visual communication. She is writes for Money College about her personal finance experiences as a student.


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