For many, starting college means the start of your financial life. Even if college direct costs like tuition and fees are being paid by a combination of scholarships, parent’s cash contributions, and loans, there are a bunch of different indirect costs associated with being a student that you may be paying yourself. For many students, using their first checking account is a great way to carry around less cash to pay for expenses.
Getting a Checking Account
Many banks have checking accounts with fees and restrictions that make them less than ideal for college students. Opening checking accounts before the big move to college can make life a little easier. A checking account with a debit card allows you to quickly and conveniently pay for purchases almost anywhere. Work with a financial institution that has checking accounts with no or easily avoided monthly fees, solid overdraft policies, extensive ATM networks and mobile and online banking.
Common Expenses for College Students Use Checking Accounts to Pay
Checking accounts can be used to pay for everyday college student purchases like groceries, eating out and gas. Often times, college students use their checking account debit card vs writing a check. Also, checking accounts can be used to pay for bills like car insurance, internet services and water, gas, and/or electronic utilities. Checking accounts make it easy to pay the bill directly from your online account by either paying for the payment one-time or setting up automatic payments.
Depositing in Checking Account
Checking accounts make it easier not only to pay bills but also to deposit your paychecks. If you have a work-study or part-time job, you can deposit your paychecks directly into your checking account. In fact, many colleges (and employers) make it easy to sign up for direct deposit. Most often the college or employer will have a form to have the name of the financial institution, mailing address, routing number, account type, and your account number.
In addition, if your financial aid exceeds your direct college costs, then the college may send you a refund to pay for your indirect college costs. Typically, refund checks are sent out the first two weeks of the enrollment period. To speed up the process, consider signing up for direct deposit for these funds. For some this means, they will get their excess financial aid funds in their checking account on the first day of the enrollment period.
For other college students, they may get checks or account transfers monthly or by enrollment period from their parents to help fund their checking account.
Creating Good Financial Habits with Your Checking Account
Most college students are on a budget, so consider using your checking account to help you budget. When budgeting it is key to understand the income or resources and the expenses. If all your money for your budget is deposited into your checking accounts, then it's a great resource to chronicle the amounts and ensure you don’t over spend.
Since your checking account will track all deposits and withdrawals, you can easily use it as a tracking tool. If you use your debit card instead of cash, you can have a digital account of each location and amount that you spent money. Also, all your physical checks and online payments will also be tracked including the name of organization and amount.
Paying bills on time helps to build good credit, so set up automatic payments to ensure required payments are made by the due date. Of course this means you have to have enough in your checking account to make the payment. By paying when scheduled automatic payments go out, you can ensure you have sufficient funds.
Even if a checking account offers a low to no balance required, consider creating a financial buffer.
Emergencies can happen, so plan for them in advance.
Estimating College Costs
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Colleen Krumwiede
Co-Founder & Chief Marketing Officer
Colleen MacDonald Krumwiede is a financial aid and paying for college expert with over a decade of financial aid experience at Stanford GSB, Caltech, and Pomona College and another decade at educational finance and technology companies servicing higher education. She guides go-to-market strategy and product development at Quatromoney to transform the way families afford college.
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