A piggy bank with pennies scattered around it.

Do’s and Don’ts: How to be Financially Healthy in College

By Tory Hyde

When it comes to living healthy, financial health probably isn’t the first thing that comes to mind. However, financial responsibility is key for a college student on a budget.

What is Financial Health?

According to UA’s Project Health and Gamma, financial health is defined as “… the state of one’s personal financial situation in regards to how much money you have now, how much you have saved and the financial practices you engage in.” In other words, it’s all about how you handle your money now and in the future.

As a student you make financial decisions every day, and resisting the urge to spend money can be tricky, even with the threat of post-graduation debt lurking around the corner.

Here are some tips to help you stay on track financially.

DO’S:

1. Make a budget. 

Dr. Sherwood Clements, a UA instructor who teaches economics, finance and legal studies, suggests making a budget.

“Fixed expenses like rent and debt payments are easier to budget, but the variable expenses are where students can get in trouble,” he said.

Variable expenses include food, entertainment, monthly subscription services and travel. This is where students can easily break their budgets.

2. Get insurance.

Insurance prevents you from suffering financially after an unexpected event. Always keep a certain amount of money saved for emergencies and add to it in case you need it. If you get into an accident, auto insurance will cover the cost of repairing it. If you have a medical emergency and need to go to the hospital, your health insurance can cover that bill.

“Do not miss insurance payments,” Clements said. “These can be devastating to financial health.”

3. Develop a credit history.

Clements recommends students develop some sort of credit history. You can do this by getting a credit card, taking out a car loan or taking out a personal loan. He said not having any credit can be difficult.

DON’TS:

1. Don’t spend carelessly.

Sometimes it’s easy to swipe your card when paying for something without thinking of the money just spent. Always be aware of what your bank balance is and determine if you need or want the item before you purchase it.

2. Don’t overdraw from your bank account.

When you go to the ATM and you realize your balance is really low, don’t overdraw money out of your account. Most banks will charge you a fee, which makes accruing debt even easier. You should check your balance before making large purchases or when you buy a lot of things at once, as when you buy groceries.

3. Don’t set yourself up for late payments.

Clements said students should make sure they are not late on their debt payments. Whether you are paying back your parents or someone else, payments are considered late when they become 30 days delinquent.

To learn more about how to maintain your financial health, visit Project Health Wellness Topics and click the “Financial Health” tab.