July 16, 2014 Posted by: Estefany Chiquillo-Sosa
Being a student can be hectic and overwhelming, but it’s also a great time to start learning the basics of money.
After speaking to several students about how they handle their money, I realized that most of them know very little about the ins and outs of what to do. To help out, I created a list of the five things every student should know.
1. Don’t let your parents choose your financial institution. Choose the one that fits your needs.
Have you ever stopped to think about why you may have a checking account at the same institution as your parents? Just because a certain place works for your parents doesn’t mean it will work for you. Try to find a financial institution that offers free checking; one that does not charge exorbitant fees; and one that has a product line specifically set up for students who are just beginning to build their credit.
2. Are you a member or a customer?
Many students don’t know the difference between a bank and a credit union. The most important thing to understand is that banks are for profit — you are considered a customer and a bank’s goal is to maximize profits to pay company stockholders. A credit union is a not-for-profit organization operated for the benefit of its members. Instead of maximizing corporate profits, a credit union invests its resources to deliver lower rates, outstanding service, and member benefits. It’s like a bank you own — with the privileges of membership to boot.
3. Know the basics of your checking account
What type of checking account do you have? Turns out many students don’t even know that they are eligible for a student checking account (these traditionally don’t charge fees). The requirement for this kind of account is typically proof of enrollment in a school. Do some research and find out if your bank or credit union offers student accounts. If not, it’s time to change.
4. Build credit
Have you ever been denied while trying to rent an apartment or buy a car? If so, you probably have either very limited or no credit history. The easiest way to fix this is by getting a credit card. Sure, you may have heard to stay away from credit cards; but, if you control your spending and pay off the entire balance each month, you can start building good credit for the future.
5. Start saving today
Don’t wait until after college to start saving. Even though you will probably be making more money after you graduate, you may also have a lot more financial responsibilities. Play it safe and save for the future now. It can be as little as $10 from each paycheck. Try to put your money into a high-yield savings account so you can watch your money grow.
Estefany Chiquillo-Sosa is an intern at Technology Credit Union. If you’d like to learn more about our student banking products, go online or contact us at (408) 451-9111.
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