As you gear up to go back to school, you’re dealing with any number of expenses: from your first tuition payment and dorm supplies to textbooks and much more.
Paying for them upfront with cash is a great idea in theory, but starting to take advantage of your credit card and build your credit score has its pros as well. With that, here are three tips for using credit for your back-to-school purchases.\
Tip #1: Understand where your cash comes from to build a budget
Start by understanding where your money comes from. Did you work over the summer and save? Are you receiving financial aid? Are your parents or guardians helping out?
Put together a list of all those income sources, and add up the money you’ll have on hand for this semester’s expenses.
The 50/30/20 rule is a great guide to follow for building a great budget:
- 50% of your money should go to living expenses: rent, gas, food, tuition, and so on
- 30% should become your disposable income for eating out, attending events, and any other fun purchases
- 20% should go to your savings account for emergencies… or next semester!
Tip #2: Define the best times to use cash vs. credit
Next, let’s think critically about how and when you should use your credit.
For example, the back-to-school season can come with a ton of expenses within a short period of time — and maybe you don’t have quite enough cash on hand to cover all of them comfortably. In this situation, it makes sense to put part of those expenses on your credit card for more financial flexibility (not to mention the credit-building opportunity).
Kasheesh also offers the ideal solution here: With our Google Chrome extension, you can split your online payments between your debit card and credit card. This shares the load of big purchases like tuition installments and textbooks — without putting too much strain on your wallet vs. your credit bill.