Welcome to “Coaching Corner,” a blog we hope will help you make smart decisions with your money and get through school without breaking the bank.
Each semester millions of college students ask an important question – “What should I do with my financial aid refund?” That’s the money left over from your financial aid after your school takes out for tuition and fees, and housing and food costs if you live on campus. As a financial coach who has worked with college students for several years, I have seen this handled in many different ways, sometimes with pretty rough consequences.
Many students have asked me, “Is this my money? Can I spend it on whatever I want?” That’s a tricky one. Yes, of course it is your money. For many students, it’s the most money they’ve seen at one time. You may be tempted to buy things you want (but don’t really need) or even send some money home to your family. But that’s not what financial aid is for.
Making wise decisions with your money means taking a moment to think about what happens next. If you don’t work or have financial support from your family, you’ll have a hard time surviving the semester if your financial aid refund runs out. That refund is meant for education-related expenses and must last you the whole semester and possibly the beginning of the next semester.
To stretch your refund, you’ll want to set up a spending plan. Students have told me they thought it would be too complicated or too much trouble. It doesn’t have to be. Start by taking the amount of your financial aid refund and dividing it by the number of months in the semester (usually 5). That’s the beginning of your monthly budget. Now that you know the amount you will have each month, you can plan ahead so you don’t spend more than you have. A spending plan shows you where your money’s going and can help you find areas where you can maybe cut back a little.
Save money where you can. Ideas include:
- Buying or renting used textbooks
- Looking for student discounts at stores and restaurants you visit
- Set limits on eating out and entertainment. Search the web for free events in your town.
- Look for activities going on around campus. They may offer free meals, and you can meet new people.
Taking the time to set up a budget and sticking to it as best you can will save you from some big financial headaches at the end of the semester. And you’ll be developing good money habits that will last a long time.
Watch for more from the Coaching Corner soon!
I am a Financial Coach for college students and parents. I am an Accredited Financial Counselor (AFC®) and received my BBA in Management from Texas State University. I help students understand their financial aid and help them develop a plan to achieve their educational and financial goals. I was a first-generation college student, so I have a personal understanding of some of the struggles students face.
Working in the financial aid industry for 13 years has given me the opportunity to work with students at different points in their life from starting college to graduating and finding a job — all the way through helping them repay their student loans and save for the future.