How should I manage my scholarship money once received?

I'm fortunate enough to have received some scholarship money, but I'm not entirely sure how to use it responsibly to pay for college expenses. How should I prioritize what the scholarship covers? Are there common pitfalls to avoid when allocating scholarship funds?

Congrats on your scholarships! That's a great achievement and certainly will help in easing college costs. Start by considering the type of scholarship you have: is it a merit scholarship, need-based scholarship, or perhaps an athletic scholarship?

Some scholarships are strictly stipulated. For instance, your scholarship might note that the funds are to be used only for tuition and not towards living expenses, or specific categories of expenses. Always take the time to understand the terms of your scholarship to make sure you're abiding by them.

As a general rule of thumb, prioritize the funds to cover the most pressing expenses. Most often, this means tuition and fees, given they are typically the biggest expenditure. The remaining funds, if any, could be directed toward housing, books, or supplies. If the scholarship does allow it and you have money remaining after covering basic academic costs, consider setting aside money for any unexpected college expenses that might arise.

A point to remember is that while winning multiple scholarships can significantly aid in covering college expenses, it may sometimes affect your financial aid eligibility. The total of your financial aid and scholarships shouldn’t exceed the cost of attendance. If they do, colleges will reduce your financial aid package by the amount that exceeds the cost. In most situations, loan components of the aid package will be reduced first, then work-study, and then maybe even grant aid.

Lastly, try to avoid spending scholarship money on non-essential items. While it might be tempting to buy that new laptop or splurge on takeout, it's crucial to be prudent and spend primarily on necessary educational costs.

The key is to be responsible, and judicious, and maintain a budget that tracks your college expenses. This will allow you to get the most out of your scholarship funds and lessen any financial stress while in college.