You may be using student loans or credit cards to help pay for school and living expenses. Considering your expenses can help you spend money wisely and avoid excess debt. If you don’t manage your money properly, you may be paying interest for years to come.

Borrow only what you need

Don’t get in over your head. By budgeting before you borrow, you may be able to reduce or eliminate some loans. This can save money on interest payments and avoid damaging your credit.

Create a budget of your own

A budget allows you to track your spending, as well as see how much money you are going to need to borrow for school. There are many online tools to help you create a budget, such as MyMoney.gov and EducationCents.org. Below are some general guidelines in creating a budget.

• Begin by keeping a log of all expenses, even small purchases. This will allow you to see how much you spend monthly on various items, such as food and gas.
• After listing your total expenses, see where you can reduce your spending. You do not want to spend more than you realistically afford.
• Though you may find it hard to cut back on food and rent, you may be able to reduce spending by avoiding small impulse items like snacks.
• You can limit your spending many different ways. Don’t use a credit card unless you have to. You can also try carrying only as much cash is absolutely necessary, and plan ahead so you can avoid incurring ATM fees.
• If your spending is out of control, you may be able to get help from your school’s counselor. UCCS counselor contact information is available here.
• Anticipate what affect graduation will have on your financial situation. It may take months to find a job, and you may have to begin repaying student loans during this period. Make sure you are financially stable throughout this transition.
• Be realistic about your degree program. Look into the starting salaries of your field, and consider if you are able to maintain your current debt and living expenses.

Work and pay cash for personal expenses

Working part time (10-20 hours a week) while in school allows you to pay for expenses and reduce the need for a credit card. Although some students find it difficult to work while in school, it provides financial flexibility and allows you to avoid accruing interest on credit cards and unsubsidized loans. Information about the advantages of working while in school, as well as job postings and employment assistance, can be found on UCCS’s Student Employment website.

Keep track of Federal student loans

You must pay back your student loans. By keeping a log of your payments and accruing interest, you will be able to see your total indebtedness and budget repayments. The NSLDS (National Student Loan Data System) allows you to view all of your federal student loans and their current amounts. You will just need your Department of Education PIN (same as the one used on the FAFSA).

Pay off interest as it accumulates

Unsubsidized Stafford loans accumulate interest while you are in school. If you do not pay it, the accumulated interest will be capitalized with the rest of your loan.

• Any unpaid interest on the loan will be added (capitalized) to the principal balance of the loan, meaning you owe more in interest each successive month.
• Making early payments on your loans will reduce the amount you will owe after you graduate. There is no penalty for prepayment.
• Any payment will reduce outstanding balance, and ultimately reduce the total cost of the loan

Example: If you pay a $20.00 per month towards your unsubsidized Stafford Loan during your four-year stay as an undergraduate, you would lower your loan balance by almost $1,000.00.

Avoid credit cards and know how to manage your loan

Avoid making tuition payments with your credit card. More often than not, student loans are available with better interest rates than your credit card company offers. If you absolutely must have a credit card, find one with the best terms available to you. It helps to look for features like no annual fees and low interest rates.

Avoid credit cards that charge interest from the date of purchase with no grace period as well as cards that charge interest immediately on a cash advance, plus charge a fee for each cash advance. Avoid cash advances.

Avoid applying for more than one or two credit cards at a time. Each inquiry about your credit is included in your credit report. A low, manageable credit limit will also help with this goal.

Consider living arrangements

Consider your living arrangements, and if there might be a better or more affordable option available for you.

Living with parents may be cheaper, as you may not have to pay for rent, food, or utilities. This may not be realistic, depending on your parent’s circumstances.

Both on- and off-campus housing have their advantages. By getting additional roommates, you can split the costs of rent and utilities, further reducing your spending.

Additional resources

More information about managing debt while in college can be found all over the internet.

• Information about your student loans can be found at NSLDS.ed.gov and StudentLoans.gov provides information about your direct (Stafford) loans.
• General information about managing student loan debt can be found at Mapping Your Future. Help with budgeting and overall money management can be found on MyMoney.gov