by Aman Kaur, Financial Wellness Peer Advisor
For many students, a financial aid refund is a sign of relief and serves as an extra source of income for the quarter. So how can you use your refund and how can you make the money last the entire quarter after paying for necessary expenses? Here are some smart suggestions on how to spend or save your check.
Boost Your Emergency Fund
Most college students do not have money saved in cases of a medical emergency, unemployment, an increase in the cost of living, or car repair expenses. An emergency fund is three to six months of income saved in case an emergency arises. Funds can be big or small depending on your income size, and no matter your income it is always wise to save!
Pay Your Debt
Do you have student loans, credit card debt, or other outstanding bills? Utilize your refund to pay off any outstanding balances in order to invest in your financial freedom and to stop loans from compounding every quarter. By applying your refund to your debt, you can bring down your monthly payments resulting in smaller payments and interest saved. Gain your independence from loans and debt by moving your money smarter!
Start a Savings Account
A savings account is an account where you can save your money for long-term needs. A savings account may help your money grow and prevent you from spending on impulse purchases. Research interest rates and trustworthy banks before opening up a savings account.
Invest in Your Future
Are you planning on buying a house in the future or operating your own business? In order to buy a house in the future you must save money for a down payment and be ready for mortgage payments. If you wish to open a business, you should save for operation costs, permits, and legal fees. Owning a house or a business is an excellent option to start investing your money into assets rather than liabilities.
No matter how you choose to use your refund, investing in yourself now will pay off in the long run.