| By :
Molly Wider
Are you under 25 years of age? Are you living on your own dime? Struggling with school, rent, and all the payments that come with becoming an adult? Here's some money advice especially for you that may help you avoid the average $3,000 credit card debt of new graduates, and their $25,000 average student loan debt. With careful budgeting, you won't need a credit card, and you can keep your student loan debt to a bare minimum. Big sums can overwhelm Get used to handling large sums of cash. Often it's a trial-by-fire for young people when they first borrow money to go to school. Student loans are generally awarded in lump sums in fall and winter and it can seem like a huge amount to someone who hasn't normally had much cash in the bank. So, get accustomed to having a large cash infusion that has to last several months, and budget accordingly. And $5,000 isn't as much as you think-it'll fly from your account if you don't carefully manage it. Pay everything you can in full, up front As soon as you get your loan, pay all your student fees, buy your books, and if you've rented an apartment, see if you can pay for at least one full term. This will ensure that your rent is paid, you don't blow the cash for your digs, and you have a place to live for the term. Try to negotiate a lower rent with your landlord because you're paying in advance. And always, always get a receipt for your rent, and your agreement in writing. Avoid credit cards and lines of credit Don't get sucked into getting a credit card. In your first few days on campus, credit card offers may be everywhere. Don't fall for one-even if all your friends have one. Make all your purchases with cash to ensure you live within your means, and graduate with as little debt as possible. Canadian student loans are now often managed as lines of credit. This can be really overwhelming since you may have access to the full year of your student loan right from September. Banks argue this saves you money, since you only pay interest on what you borrow. However, for most students, a better choice is to put your money into an account that you can't access except by going into the bank, and then transfer monthly amounts into a chequing account for ongoing expenses. Put your money into savings Put what's left of your student loan into an account that's not accessible by your debit card. Figure out how much money you can spend each month and transfer only that amount into a chequing account. Make up a budget for groceries, bus fare, your laundry, nights out, and other costs and put cash into envelopes marked for each. When you spend from the envelope, put your receipt in so that you can track your spending. Live at home Live at home if you can. Although you may be anxious to spread your wings, living at home can be a smart choice. Renting even just a room can cost thousands, and parents can be handy rides, sources of unexpected funds, and even good advisors. So if you can stand to live at home, it'll save you plenty of money. If you build good habits when you're first starting out, you will likely continue to have good spending habits later-and you may finish your education owing a lot less money than your freer-spending friends.
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