Debt Management

While it might seem a bit premature, it’s never too early to start saving and managing your debt. Follow these steps beginning in high school to create a solid foundation for your future finances:

• Get organized. Students should set up separate files for their bank statements, credit card bills, phone bills, gas and electric bills, insurance payments, financial aid papers, loan documents and correspondence from their financial aid administrators. Keep all financial records in a safe place.
• Create a spending plan and stick to it. Students should begin this process by setting up a financial planning worksheet. They should record their income and expenses in a notebook for about a month to get a better understanding of their spending habits.
• Borrow smart. If it appears a student will need to borrow to pay for college, he/she should calculate how much they can afford to repay by looking at their monthly payments, expenses and what they can expect to earn after graduation. It’s imperative to set borrowing limits.
• Start saving. While the prospect of saving may seem impossible to students, even putting away $20 a month will start a habit that will last for a lifetime, and provide a cushion for unexpected expenses.