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Money Minute: 5 things every college freshman should know about money

Classes are starting soon for the class of 2019, so we dedicate this week's Money Minute to you guys. Here are 5 things every college freshman should know about money:

Student loans aren’t free. Many students make the mistake of borrowing more than they need, so keep this in mind: the less you borrow, the less you’ll have to pay back after you graduate. Sure, you can use student loans to pay for your student fees, books, room and board and meal plan, but there are ways to cut those costs and lower the amount you need to borrow. For example, you could ditch the dorm and rent a place with friends to save on housing. You could get a job as a resident assistant and live in the dorm for free. To save on food, try skipping the meal plan and learn to cook instead. Your books don’t have to be brand new either. It might make better financial sense to spend a year or two at a low-cost community college and transfer to a more expensive four-year school to finish your degree.

Don’t give up on scholarships after your first year. Keep a list of scholarships you’re interested and make it a point to keep applying.

To get an idea of how much your student loan bill will be after you graduate, use this monthly payment calculator from Bankrate.com.

Credit card companies aren’t your friend. A smart way to build credit in college is to become an authorized user on a parent’s credit card. Yes, you can get a card of your own, but be careful about interest and fees — the average credit card interest rate today is nearly 15% (those awesome 0% APR introductory rates sound good, but remember, they're only temporary!). If you carry a balance on your card, those interest fees will just keep growing out of control.

Don’t make the mistake of thinking that you’re building credit just by charging a bunch of stuff on your card. You build credit by paying your balances off in full each month. So try this: Use credit to pay for ONE small recurring bill  like your cellphone  then pay the whole thing off each month. That means no shopping sprees, no study abroad trips, no spring break getaways -- unless you can afford to pay them off immediately. This will take serious self control but you’ll be rewarded for it with a stellar credit history after you graduate, not to mention good saving habits. Good credit will make it easier to qualify for low-interest car loans, rental housing and it can even make you look better to potential employers.

Your major does matter. College is a huge financial investment, and you want to go in with some sense that what you study will get you a job that pays the bills -- including those student loan bills. Check starting salaries using these tools from the Hamilton Project or Payscale.com for your field. If your expected earnings look a lot less than what you’ve borrowed, maybe it’s time to rethink your major -- or your school of choice.

You have to apply for financial aid every year. Lots of families don’t realize that the Free Application for Federal Student Aid (FAFSA) isn’t a one and done deal. You have to reapply for student aid every year to qualify for student loans and work-study programs. If you miss the deadline, you’re out of luck. Deadlines vary by state. Check out your state’s deadline here.

Internships are vital. Forget your GPA -- surveys have found that job experience is the most important thing employers are looking for in college graduates. Choose your internships and part-time jobs carefully while in school. Check in with your college’s career services department and ask for an appointment with an advisor who can help you find internships that fit your interests. Nobody wants to hire a graduate with an empty resume.

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