Many students will experience their first taste of fiscal responsibility during their freshman year.
Experts at area financial institutions offered some banking tips for incoming freshmen.
"Before going to college, it's a good idea for students to establish a bank account so they get used to it," said Aimee C.L. Britt, branch manager of the East End Pottstown location of Harleysville National Bank.
Opening an account at a bank that is close to school — as opposed to one near home — will make everyday transactions a lot more convenient.
Harleysville National Bank has ATMs on the campuses of Ursinus College and Delaware Valley College, according to Britt.
National Penn Bank has an on-campus presence at Penn State's University Park campus through its subsidiary, Nittany Bank, as well as sites at Muhlenberg College, Lehigh University, Franklin & Marshall College, Delaware Valley College and Kutztown University, according to Chrisann Hoehl, vice president of National Penn Bank's Central Region.
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Harleysville National conducts on-campus presentations to educate students about what the bank can offer them in terms of accounts and loans, Britt said.
National Penn provides a "coaching session" for those setting up new accounts to walk them through how the account works.
For a college freshman who has not had a bank account before, a good place to start is a depository account "such as a statement savings account" with no minimum balance requirement, Britt said. "It helps students to get a start and be able to earn interest," she said. "They get used to getting statements and they get used to being savers."
Establishing a checking account, which typically comes with a debit card, is also an important and practical step, Britt said. The majority of teens entering college do not already have a checking account, in Britt's experience. Opening and getting used to a checking account before moving to campus is something she recommends.
"Very seldom do you see accounts opened until they get into the timeframe of college," Britt said. "My experience is that those who do open checking accounts ahead of time have a better grasp of them. They can open a checking account as early as 16 or 17 at Harleysville. It's a great grooming ground for them."
Choosing an account that suits your needs is key — such as one that includes online banking or free checks.
According to Hoehl, many students are unaware of the conveniences of online banking and online billpay — services that are often free to account holders.
"Students can get online at 2 a.m., if need be, to check their accounts or pay a bill. Not everyone is aware that that's a free service, and I don't think they take advantage of it," Hoehl said.
For the college student, it can be advantageous for a parent to be added to an account — something that allows for "emergency" deposits to be made quickly and easily, according to Britt.
National Penn offers free, one-way electronic funds transfer from a parent's account into a student's bank account — at any financial institution. That emergency option has been quite popular with both parents and students, Hoehl said.
The bank also offers an Automatic Savings Account that puts $10 a month into savings from another account, according to Hoehl. Such forced savings can establish a little nestegg for unforeseen expenses.
Once at college, situations will arise where the student will want to spend money, such as movies, dinners out, and textbooks. With debit cards, it's important to keep accurate records to keep from becoming overdrawn, Britt said. In the case of credit cards, and the multitude of pre-approved offers aimed at college students, it's important to understand the fees, annual percentage rates and spending limits. A spending limit of $500 to $1,000 for a first-time user is "ample," she said.
"Read the fine print. Be wary of teaser rates and penalties. Always be mindful of the fact that with a credit card, you have 30 days to pay without fees," Britt said. "You want to create a positive credit history."
Ultimately, there's nothing wrong with good, old-fashioned frugality, according to CollegeView.com, which encourages students to "live like a college student."
"Live like a student while you are in school, or you will live like a student when you get out," said Soni Williams, director of student financial aid and scholarships at Ohio University in Athens. Too many students borrow more money than they really need, often blowing it on Friday-night fun, she said. Then they spend years paying it back after college.
