Taking a gap year before starting college is a common rite of passage in many countries, and it’s been growing in popularity in the U.S., too. According to a Teens and Money survey done by TD Ameritrade, 35% of students in the US have considered taking a gap year.

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But gap years aren’t just for hostel-hopping around the world. You can make the most of a gap year by using this time to set a strong financial foundation for yourself.

Spending a Gap Year Traveling and Working Abroad

Some students who choose to travel for a year have the family resources to afford the experience. But there is funding available for those who need financial assistance.

Organized gap year programs sometimes offer scholarships and financial aid. If you’re considering a formal gap year program, there may be money available to help offset the cost. If the program can be taken for college credit, you can use funds from a 529 savings plan to pay for it, according to the Gap Year Association. Complete a Free Application for Federal Student Aid (FAFSA) as well, to see if you qualify for federal financial aid.

Many countries have short-term work visas that make it possible to work while living abroad, which can help you fund your gap year while getting valuable work experience.

Spending a year abroad can be expensive, but scholarships, financial aid and a gap-year job may be able to help make the experience more affordable, and the benefits can be valuable. “There’s an extra maturity that comes from being a year older as a freshman and seeing the world,” says Galen Herbst de Cortina, Lead Planner at Buff Your Finances.

Spending a Gap Year Working in Your Hometown

This gap year is an ideal time to work and use your income to begin paying for more of your own expenses. In just a few years, you’ll be working full-time and supporting yourself financially. “It can be eye opening how much life costs,” says Bridget Handke, CFP® CAP® and Principal Financial Advisor at Birchwood Financial Partners.

Many students instead choose to spend the year before college at home, so they can work and save up money. “Some of the biggest things they could do are start doing the more adult things,” like building credit or funding a Roth IRA, Herbst de Cortina says.

“Obtain a credit card and charge a couple of items regularly on it that is about the same amount every month — such as gas and groceries,” Handke says. “Set up an automatic payment to pay the statement balance each month. When you receive your statement, confirm that you have the funds available in your bank account to make the payment. Never miss a payment or be late. It is best to pay the entire statement balance each month, so that you don’t pay interest.”

These actions can help you build your credit, which will make it easier for you to rent an apartment, get a cell phone plan and even access utilities without an initial deposit, once you graduate.

Using a Gap Year to Plot College Goals and Costs

If you’re on the fence about what you want to major in once you get to school, a gap year can provide the space and time to gain greater clarity. This can save you both time and money, compared to staying in school for more than four years because you switched majors halfway through.

Herbst de Cortina is a fan of intentionally going to school, as opposed to going to school because someone told you it’s what to do next. “Work on figuring out what you want to do,” he says. “I know that’s easier said than done, but if you’re going to college just to go to college, that’s taking on a bunch of debt for something that won’t necessarily help you. Ask yourself: Do you need college? Should you go to school part-time? What about community college?”

If your family’s financial situation changes during your gap year, fill out the FAFSA again to keep your records up to date. Next, sit down and do the math: How much money do you need over the next four years? How much student debt will you be taking on, and how much will debt repayments cost you each month in the future? Look over the financial aid you’ve been offered and determine if you need to borrow the full amount of loans available to you, or a smaller amount.

“A lot of people just take what they’re offered, which is more than they need,” Herbst de Cortina says. “Don’t take out the maximum in loans if you don’t need it.”

Practicing Your Independence at School

Acting as a responsible, independent person doesn’t take a hiatus once you’re back in class. College is when you can test out living in the real world, but with a solid support system at your disposal.

If your college course load allows for it, consider working part-time during the school year, and working in the summers as well. If you’re paying for your own tuition, this may help reduce the amount of loans you’ll need to take out.

You can also budget your earnings to help you afford expenses like rent, groceries and transportation. Practicing budgeting as a student will make it easier to plot out your finances as an adult, when life gets more complicated.

Begin thinking long-term with your money. If you have earned income, you could begin preparing for retirement by investing some of your savings in a Roth IRA.

You could also set aside some savings for when you get your life started after graduation. You may need to relocate, put a deposit down on an apartment, buy a car or build up a work-appropriate wardrobe — all within just a few months. Saving up for these costs can help you avoid taking on credit card debt.

Maximizing Your Gap Year

If you’re going to take a year off in between high school and college, take full advantage of this time to gain valuable life experience — both personal and financial.

There usually aren’t many times in life where you can really think about who you want to become. Travel, work, save money and begin setting good financial habits. Then, you may be able to begin your first year with confidence and a real head start.

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