Steps You Can Take In College that Will Set Yourself Up for a Healthy Financial Future

Steps You Can Take In College that Will Set Yourself Up for a Healthy Financial Future

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As a student, focused on your degree and trying to juggle the many responsibilities of adult life, it can be easy to lose sight of your finances, especially with so many zeros floating around.

However, if you just let go of your finances while in college, it can be detrimental to your future financial health.

Now, no one is saying that you need to get out of college debt-free or even remotely so. However, rather than simply giving in to the out-of-control nature of college debt, here are a few steps that you can take to curb its effects, minimize the damage, and ultimately set yourself up for financial success in the future.

Create a Budget

Make a budget! Everyone says it because it’s important. If you don’t create (and stick to) a budget, even in your younger years, you’re going to have no idea what you’re spending, how much your borrowing, or how deep the hole is that you’re digging.

If you want to maintain a semblance of control over your monetary state throughout your academic journey and beyond, you need to start with a simple budget. This includes:

  1. Adding up your income (including student loans).
  2. Tracking down all of your expenses.
  3. Tallying up income and expenses in order to see how your spending compares to your available cash.

While there is much more that you can do with a budget, even performing these three, simple, preliminary actions can make a world of a difference in how much you are or aren’t aware of your financial state.

Manage Your College Expenses Now

As a college student, it’s important to realize how much money is a driving factor in your future socioeconomic status (i.e. your social position.) And this isn’t just referring to the quantity of money that you have.

You can have all of the money in the world and still squander it or have a very modest sum and manage to be quite successful.

The point is, the way that you handle your money can have a huge impact on how high you climb — or how far you fall — in the future. That’s why you should start adopting healthy money habits in the here and now, while you’re on campus.

There are many ways that you can practice managing your finances in college, such as taking advantage of student discounts, picking up a gig job to generate extra income, carefully tracking your spending, and creating the aforementioned budget. These activities don’t just help you now, they also cultivate good money habits that will serve you far into the future.

Start Thinking About Big Expenses

While you may already feel overwhelmed by the costs of college, the truth is, it never hurts to start thinking about future big expenses as well. This doesn’t mean you should start fretting or stressing out about them, though. On the contrary, it’s a call to learn about and mentally prepare for them so that they aren’t as intimidating when the time comes to make them.

Things like a wedding, getting a car, buying a house, and having a child are all blessed-yet-expensive events, and laying the groundwork early for how you plan to handle them financially can be immensely beneficial.

Take Savings and Debt Seriously

Finally, make sure to take the concepts of savings and debt seriously while you’re in college. The latter is likely an old friend, at this point — at least in the form of student debt. However, just because you have a lot of debt doesn’t mean you can ignore or, even worse, add to it willy-nilly.

Instead, strive to maintain a healthy respect for the destructive power of out-of-control debt. You may even be able to use your current debt to help establish your future financial health.

For instance, making debt payments on time and attacking your debt with extra payments are both excellent ways to improve your likely fledgling credit score.

In addition, if you can begin to consider the benefits of maintaining savings, both in the short- and the long-term, it can help you weather financial struggles down the road without compromising your indebted position even further.

Things like emergency funds and short-term savings can help you if you lose a part-time job, have an unexpected medical procedure, or are thrown any other financial curveball while you’re in school.

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On top of that, if you can begin studying long-term retirement savings options now, you’ll be able to start squirreling away funds for the future at an earlier age. This will allow you to take full advantage of the effects of compound interest and set you up for a stable retirement down the road.

Creating a Healthy Financial Future Now

Whether you’re pulling together your first budget, tracking your college expenses, planning for your first mortgage, or looking into the nuances of a 401(k) plan, there are many different ways to prepare yourself for the financial challenges of life — even when you’re in college.

The important thing is that you take the task seriously and invest yourself in learning the lessons that good financial management offer. If you can do that, you’ll be able to set yourself up for healthy finances for the foreseeable future.

Image Credit: healthy financial future by envato.com

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Categories: Money Tips

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