You’ve been in school for a few weeks now. You’re finally settling into a routine. You’ve unpacked, met most of your professors, and are finally adjusting to life at college. After paying off the term bill some students may receive a refund check. Refunds consist of the money that is left over if your financial aid award exceeds the amount of money you owe. If you are entitled to a refund you will be able to receive it by either mail or through a form of electronic payment. While it may be refreshing to be able to have a bit of extra cash, students are often tempted to spend it carelessly. Here are some tips how to spend your refund check.
Pay back your loans. If a surplus of student loans are causing the refund you would be responsible for paying them back eventually. What you can do with this money is repay one of your loans right away. It may feel as if you’re giving “free” money back, but using it to settle your finances with leave you with less debt to pay off when the time comes.
Cover your living expenses and settle debt. Some students find themselves in situations where their refund check enables them to pay rent or other bills a couple months in advance to alleviate certain financial burdens for a period of time. You can also pay off credit cards or settle other debts.
Buy school supplies and pay fees. Use the money to pay for textbooks and materials for school. Maybe you have a lab fee you need to cover or if you’re approaching graduation you may have the GRE, MCATs, or other grad school expenses to think about at some point.
Create a plan for how you will spend that money and try not to deviate from it. Allot parts of your refund check for certain things. For example, you can decide to dedicate half the check for rent and allocate the rest for textbooks.
Save it. There’s nothing wrong with not spending your refund check if you do not have to. Life is full of surprises and sometimes those surprises cost money. Having a cushion to fall back on is always good.
Do not stop working. This refund check is not an excuse to drop everything and stop going to work. While your refund may be a significant amount, if you depend on it for living expenses with no other income, it will be gone faster than you received it.
Don’t add on extra expenses. Getting a payment or opening a credit card may seem tempting with this extra cash in your pocket. If you didn’t need it before the refund check, then chances are you do not need it now.
Do not spend carelessly. Try not to dive head first into spending. While it might be tempting to have extra money in your bank account remember that this money won’t last forever, especially if you run through it.
Don’t spend your check before you get it. Visualizing what you will spend, and potentially waste your check on can result in a series of unnecessary splurges.
Hold off on the gifts. Now that you’ve got some extra money to spare you may be tempted to loan money and buy people gifts. While the gesture is nice, you might end up giving away all of your money before you’re able to put it to use for yourself.