I recently read the results of a survey taken by college students attending a workshop as part of their summer internship. The session covered financial management, ethics, leadership, and workplace success. Aside from complimenting the instructor, many felt the financial management discussion was the most useful and well worth their time.
Now, initially I found that rather strange, but then I thought back to my own college days and how ignorant I was about managing my finances and saving for the future. Clearly, I needed someone to teach me about creative ways to pay for college, managing student loans, avoiding debt, using credit wisely, and a whole bunch of other stuff that I’m just now figuring out as an adult. Some of the best advice I can give you to avoid some of the mistakes I made, includes:
- Keep track of your spending and break any bad spending habits – Most students today are from the “microwave” generation where they want, expect, and need things to happen NOW; they don’t want to wait. Having a certain level of immediacy is a good thing, but when budgeting and managing your money, wanting things immediately, can quickly become a problem. Make sure you balance your check book, keep track of ATM purchases, and review your bank statements each month. There’s nothing worse than splurging on fancy coffee, fast food, or clothes/shoes and not having the money to pay your rent, car note, or tuition. You should always know how much money you’re bringing in (earning), and how much is going out (spending) of your account(s). Visit: https://www.mint.com/ for a free, online budget tracker to help you stay on top of your spending.
- Use credit/credit cards wisely – Although the Credit Card Act of 2010 changed the game on how credit card companies market their cards to college students, there’s still one thing for sure — you need to be wise about how you obtain and use credit/credit cards. As a college student, you will have access to credit card offers whether you have a J-O-B or not. Most companies rely on the hope that your parent/guardian will co-sign for you or add you as an authorized user on their account to help you establish credit. This is not a bad idea if both you and your parent/guardian are always aware of your balance, don’t go overboard on spending, and pay the card off as quickly as possible to avoid unnecessary interest charges. If used correctly, credit is a wonderful tool for managing your finances and wealth building, but you must understand how it works, and learn how to use it to your benefit. For some great tips on getting and keeping good credit as a student, check out this article: http://www.creditcards.com/credit-card-news/help/10-ways-students-get-good-credit-6000.php.
- Save as early and as often as you can – Most students spend their time thinking about the day they join the workforce, not the day they retire. However, it’s important to plan for retirement as soon as possible; it will be here sooner than you think. Even if you save $20/month in a high-interest bearing account with a great compound interest, it’s better than nothing. And most students spend more than $20/month on less important things. For more information on preparing for retirement while in college, check out this article: http://money.usnews.com/money/retirement/articles/2013/07/24/what-college-students-should-know-about-retirement.
As a college student, there are so many things you have to consider as you work to finish your education and prepare to enter the workforce. How you manage your finances may be the most important thing, so you need to be equipped with reliable information to prepare for the future.
If you have any other great tips or resources (i.e. websites, books, etc.) you’d like to share, post a comment in the section below. Here’s to helping you flex your financial muscle!
Until next time!