If you are wondering how college students should prepare for their financial future, here are a few tips to get you started.
Start Saving Now
Many people think that they will have plenty of time when they begin their careers to plan for their first house purchase or save for retirement. There’s no reason you can’t start getting in the habit of saving for your future your freshman year of college, though.
You don’t have to start big. If you open an IRA account with the minimum amount required and you commit to $25 a month, you are setting yourself up for success when you have the income to contribute a larger monthly sum because you’re already in the habit of saving every month.
Traditional retirement accounts are not the only option, either. You can bank on yourself with life insurance policies that you later leverage to turn into usable capital.
Make a Budget that Works
No matter how much income you have, a budget helps you manage it so that you’re not scrounging at the end of every month for grocery money.
Divide your expenditures into three categories: necessities, desires and savings. Then itemize each category.
For example, your necessities likely include rent, utilities, groceries and insurance, whereas your desires are things such as movies or other special outings.
Start with your monthly income and dole it out appropriately. Then stick to it.
A budget that you never adhere to is just a spreadsheet. Train yourself with the discipline of living within your means during your early adulthood, and you will have more financial success in the future.
Look for Deals
A great thing about living in a college town is that smart local businesses cater to students. If you are going out to eat, look for restaurants that offer a student discount. When it’s time to purchase books for the semester, look for the best deal in town or shop online. Throughout your life, you will be eligible for special deals. College is a great time to learn how to spot them.
Avoid Unnecessary Debt
It’s tempting when you first get the offer for student loans to accept the whole amount every semester. After all, you don’t have to pay them back until after graduation, and you don’t even accrue interest on your subsidized federal loans until your first payment period starts.
You will eventually have to pay them back, though, so it’s in your best interest to borrow as little as possible. You also don’t need five different credit cards. It only takes one to establish good credit, so open the account with the lowest interest rate, and pay off as much of the balance as possible every month.
Work Hard and Smart
You may decide to just focus on school your first semester or year of college. After that, though, you should look into getting a job, even if you don’t need it.
Whenever possible, look for jobs that are related to your career field or come with extra perks to save you money. For example, a resident assistant position at the on-campus dorm often includes room and board in its compensation plan, which makes it a smart financial choice and a job where you will learn valuable skills that you can take into your future career.
other valuable tips:
Protect Your Identity
Finally, make sure you safeguard your identity. If you are making all these good choices, you should be the one to benefit from them, not some random stranger. Have a different password for every account and change them frequently. Opt for financial institutions that offer at least two tiers to their security protocols.
You don’t have to wait to have healthy finances until you graduate and get your first major job. You can start building solid financial habits while you are still in undergrad.
Image Credit: healthy financial future by twenty20.com
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