How to Prepare for Emergency Expenses While You're in College
Sometimes it feels inevitable that your check engine light will come on the day before rent is due, or your dog will eat something they shouldn’t while you’ve been living off of ramen for a week.
There are some misfortunes that no one can prepare you for, but there are actions that you can take now, even while you’re still in college, to be better prepared financially for some of life’s most common emergency expenses.
Below are a few recommendations for how to protect yourself (and your bank account) from the unexpected.
Create an emergency fund:
Starting a savings account doesn’t feel like a high priority when you’re living on a stipend or paycheck-to-paycheck, but even $10 a month goes a long way towards building an emergency fund. Aim to save three to six months' worth of living expenses to cover unexpected costs and make sure your money goes into a high-yield savings account to help fight inflation.
Establish a budget:
One of the easiest ways to make sure you’re living within your means is to create a budget to track your income and expenses. There are tons of apps that help you set up your budget so you can say goodbye to Excel spreadsheets. Kora is a money app made for college students, and their budgeting tool, KoraInsights, is user-friendly and helps you stay on budget with features like personalized spending reports and low balance alerts.
Cut unnecessary expenses:
Review your spending habits and identify areas where you can cut back. Limit eating out, reduce entertainment costs, and find cheaper alternatives for everyday expenses, like transportation. The money you save can be redirected toward your emergency fund or any urgent bills that crop up.
Use student discounts:
Take advantage of student discounts to save money on everyday items and activities. It never hurts to ask retailers that you frequent, your internet provider, streaming services, or other businesses if they offer a student discount – those few dollars off a month add up over time.
Consider insurance options:
Evaluate insurance options that may be beneficial for you. Health insurance is crucial to protect yourself from significant medical expenses. Renter's insurance can cover losses in case of theft or accidents. Pet insurance could save you money on your animal’s trips to the vet. Do your research and choose insurance plans that suit your lifestyle and budget.
Plan for healthcare costs:
Factor in healthcare costs when creating your budget. Consider setting aside money for co-pays, medications, and unexpected medical expenses. If your school offers a student health center, take advantage of their services, which are often more affordable.
Prioritize your mental and physical health:
Adopting healthy habits can help reduce the likelihood of medical emergencies. Take care of your physical and mental well-being by exercising regularly, eating nutritious meals, managing stress, and getting enough sleep. Many colleges offer free or discounted mental health resources, gym access, outdoor exercise classes, and counseling services.
Be prepared for car-related expenses:
If you own a car, budget for routine maintenance, repairs, and unexpected breakdowns. Think new tires, windshield wipers, oil changes, insurance, registration, and gas. Regularly service your vehicle to prevent major issues and keep it in good condition.
Research financial assistance options:
Familiarize yourself with financial aid programs, grants, scholarships, or emergency funds that your college or university offers. If you have loans or credit cards, make sure you're aware of the interest rates, fees, minimum payment requirements, and terms.
Explore part-time job opportunities:
Consider taking up a part-time job to supplement your income and build your emergency fund. Look for on-campus jobs or flexible positions that can accommodate your class schedule. Here’s a list of side hustle ideas that are easy to incorporate into even the busiest student’s schedule.
Learn basic financial skills:
Educate yourself on personal finance management. Understand concepts like budgeting, saving, and investing. Knowing how to manage your money effectively can help you prepare for emergencies and make informed financial decisions. You could read a book, listen to a podcast, or follow personal finance content creators on social media.
Remember, emergencies can happen at any time, so it's crucial to be proactive and prepare for them. By following these steps, you'll be better equipped to handle unforeseen expenses without disrupting your education or facing financial stress.
If you need help covering unexpected expenses, check out Kora - the money app for college. With KoraCash, you can borrow up to $3,000 and choose repayment terms that work for you, all while building your credit history.
Kora has got your back!
KoraCash is an excellent option for a personal loan for students. KoraCash is a great solution for students struggling with unexpected expenses like vet bills, car repairs, medical costs, or dues for a club. Life comes at you fast, and Kora is here help you with transparent and flexible financing. Here's how it works:
- Download our app
- Apply (you must be over 18, a current/recent college student, live in an eligible state, and have an SSN)
- Get up to $3,000
- Make flexible payments when you want
One of the best parts of KoraCash is that it may help build credit history as you repay the loan. You contribute to growing good credit history without a credit card while getting access to needed funds. It's the best of both worlds!
Learn more about Kora and get started on your money app journey with a company built for college students.