Your financial aid refund money has finally reached your bank account, and you couldn’t be more excited! This exciting time comes with the “tough” decision of figuring out what to do with the money.
But don’t worry, there are lots of great things you can do with that money.
Choosing what to do with the money can be easier said than done. You’re probably considering using the money to pay for the Spring Break vacations your friends are planning. Before you start searching for plane tickets to Miami, consider these options:
Buy required school supplies
This tip is on top of the list because it’s one of the most painful college expenses. Yes, I said painful.
No one likes buying textbooks, especially if they are only using it for one semester. Textbooks can cost anywhere from $20 to a few hundred dollars. Most of your classes, if not all, will require you to buy school supplies such as textbooks, notebooks, pencils, lab materials, etc.
Every semester you’ll be asked to buy new material, and these expenses will continue to accumulate until you graduate. Use your refund money to tackle these expenses head-on. As much as we want to believe money last forever— it doesn’t. So, by buying your required school supplies, you’re limiting your chances of spending the money on unnecessary things in a blink of an eye.
Saving for a rainy day (or emergency)
This tip is underrated. Life as we know it can throw us a ton of curveballs. Being away from home means you’re responsible for dealing with unexpected situations on your own.
Where am I going with this? If you invest your financial aid refund into a savings account, you will be more than ready to deal with unexpected expenses. For instance, your computer breaks, and you need to buy a new one ASAP, you could use the money in your savings account for it.
Remember: Putting money into a savings account doesn’t mean you can’t withdraw it. It just means that you’ll have to think twice before withdrawing it.
Start paying those student loans
One of the many setbacks of taking out loans, especially student loans, is the interest rate. As time passes, your interest balance will continue to increase, and your loans will get higher and harder to pay. Thankfully, you can minimize collateral damage by getting ahead of the game.
Contact your loan servicer (most likely your school) and ask them about the current interest on your loans. Depending on how much money you get refunded, I recommend you use some of it to pay for the current interest accumulated on your loans.
However, if you do want to use the money for fun, instead of putting it towards college, here are some suggestions.
Divide the refund money into equal weekly allowances
You’ll probably want to hang out with your friends off-campus, which (unfortunately) is not free. To minimize spending all your refund in less than a month, consider dividing the money into equal weekly allowances.
By managing your money using this method, you’ll be able to afford to go to the movies, ordering food, or paying for Uber to parties throughout the whole semester.
Pay for your travels
Going home for the holidays can be very expensive, especially if you’re living a couple of hours away from home. Once you have your refund, you can start looking at tickets home and for the vacation ahead of time. Buying tickets in advance can save you a significant amount of money. If you do it when you have your refund money on hand, it’s one less thing to worry about later.
Rather than spending it all in one place, consider combining these tips in a way that works for you. You can divide your refund money as you please, whether that consists of opening a savings account, paying your loan interest and/or paying for your school supplies.
This money gives you the perfect opportunity to pay for some of the many dreadful college expenses. Make good use of the money and enjoy it while it lasts.