It’s now a running joke the most millennials usually end up with more months at the end of their money instead of the other way around.
What if you didn’t have to suffer through that same hustle when you got older? What if you could start a nest egg now while you’re still in college? Are you in disbelief?
Well, you better start believing because we’re going to teach you how to get your personal finance game on while you’re still in college.
In a recent Whatsgoodly poll from the University of Arkansas, 59% of students answered that they care about the economy/taxes when it comes to the most important issues in the upcoming election.
However, before a political leader can do anything about our economical situation, you can start making changes on your own. Get empowered!
By keeping up with your personal finances, you’ll be able to weather any economy, even with your degree in Archaeology.
Is it too early to worry about money when you still have allowance coming in from your parents? Can you possibly save money when you’re only working a part-time job?
It’s never too early or too late to start thinking about how to manage your personal finances. If you’re betting on a big check after graduation, that may not be the case. Even if your first job pays pretty well, you may find yourself in a city with a high cost of living. Either way, personal finance is a must.
Don’t know where to start? Check out these ten things that you should consider for your financial wellness.
Plan for your retirement now
Have you ever seen an old person who doesn’t work but seems to have an endless supply of money? It’s because they saved up as early as they could or made wise investments while they were still young. You don’t want to be a senior citizen and still be working because you don’t know where you’ll get the money to play bingo on Friday.
Set aside a portion of your monthly income and once it gets decent enough, talk to a financial advisor about what you can do to make it grow. It’s passive income that your older-wiser-self will thank you for.
Emergency funds ≠ Money for that shoe sale.
Emergency funds should not be touched unless it’s a life-or-death situation. Well, that’s an exaggeration, but it’s best if you have some money set aside for when desperate times happen to you.
Believe it or not, shit happens when you least expect it. A family emergency might occur, or maybe you get laid off. You’ll never know what fate has in store. Don’t risk your financial stability just because you spent that extra $100 last week on a pair of shoes that you’ll only wear once.
Set aside 1/3 of your income every month and pretend that you “lost” the money so you won’t be tempted to touch it. Don’t touch it!
Pay off your credit card every month
You know you’re an adult when having credit card debt is a part of your monthly expenses.
Sometimes using a credit card can actually be a wise financial decision. First of all, swiping that card will help to build your credit score; something we all need in the capitalist society in which we live and thrive. Even better, many credit cards offer cash-back rewards, frequent flyer miles, or other rewards programs. Those can be pretty sweet if you play your cards right.
First of all, pay the card off every month. Yes, this is the difficult part. And this is why credit card companies prey on college students. They know that many students will be tempted to hit the monthly limit, even if they can’t pay it off.
Do not be tempted. Only charge as much as you can pay off each month. In this way, you’re actually beating the system. You’re racking up all the credit card rewards and paying off your balance each month so that you don’t accumulate debt. Now, that’s smart! Maybe you can use those frequent flyer miles for a free spring break flight for your senior year!
Be aware of where your money is going
Back in the olden days, people used to use checkbooks. Perhaps you still use a checkbook. But, nowadays, there are handy dandy apps to help you keep track of where your money is going. Use them.
Download that personal finance app and use data to drive all of your decisions. With these apps, you can easily see how much you’ve spent on coffee for the last month. Woah, $80? That’s a lot of coffee! You better cut back a bit next month and only have that pumpkin spice latte on the weekends.
Having a job doesn’t mean you can make it rain
This is a common issue for recently independent kids. Having your own paycheck doesn’t mean you can make a down payment on that fancy car (which you’d still pay for monthly with interest) or rent a big-ole apartment with too much space for one person.
It’s empowering to have your own income, yes. But you’ll end up deep in debt or kicked out of your apartment if you get overwhelmed with your payments. Use public transport instead of buying a car. Get a roommate instead of living the bachelorette life alone. Cook dinner 5/7 nights a week. Don’t make it rain just yet. Not unless you’re earning 6 to 7 figures a year and a majority of your income really is disposable.
Learn about taxes
When you find out that your salary is going to be X amount, don’t for one second think that is your net income.
Don’t forget the plethora of state and federal taxes that will need to be deducted. Don’t forget about healthcare. Yes, factor in the commute. And don’t forget about food, gas, electricity, water, heating, and more.
There are plenty of online tax calculators that will give you an idea of how much is going to be taken from you and how much you’ll be left with.
Also, for tax returns, better learn that on your own unless you’re willing to shell out additional cash on hiring an accountant and just letting them do all the work for you. In fact, you better go ahead and sign up for that accounting class now.
Invest in your career
This could go a long way. There are some things about your job that you can’t learn in college.
So take control and look for classes that can help with career growth. Spend on getting certified for a certain job skill. Go ahead and pay for that seminar. Who knows, you might just meet your new employer and get a better salary just by networking and meeting the right people.
Never get too lazy when it comes to improving your knowledge because it will pay off big time.
Invest in the stock market
We’ve all seen the Wolf of Wall Street, but don’t immediately assume that investing in stocks is that easy.
If you do your research, you could earn some passive income through the stock market. Does your university have an investing club? Join it. This will pay off in the long term.
However, be advised the stock market is a bit of a gamble. What’s hot now may not be so hot the next day. Start out small and build your way up as you learn more.
Interested in investing in stocks? There are quite a few apps that allow you to invest in low-risk stocks at a low rate. Check them out!
Invest in real estate/business
Not into gambling your money on stocks and want a more hands-on approach with your investment? Then real estate or business investments might be the thing for you.
However, it can also hurt you more than you’d expect. If you want to rent out an apartment complex, you need to consider taxes, renovation expenses, and the actual cost of buying land and paying for construction.
If you want to invest in a business, you have to understand that there’s a pretty good chance that it’ll fail. Start-ups are all the rage right now for young investors, but they’re also quick to sink. Weigh your options and be careful with your money.
Don’t open a joint account with your S.O.
You’re young and in love. What a recipe for stupidity. If you’re not married, do not open a joint banking account.
Even if you share the same financial values as your significant other, it’s going to be a total problem when you part ways, and they screw you over by withdrawing all the funds in that joint account.
Be your own person and separate your finances. Also, don’t you know that money issues usually cause the biggest fights amongst couples?
Save yourself from the heartbreak and possible financial ruin.
Loans will screw you ”
If you don’t have any student debt, then do not go there. We all know that there are plenty of loan companies just waiting to give you a loan for that study abroad or spring break vacation. Do not take the loan.
The interest rates on loans for college students are through the roof, and many of the loan companies are known predators who try to make money on young and impressionable college students.
If you do have student loans, try to pay them off ASAP. Again, the interest will kill you, so live frugally for your first few years out of college or ask your parents for help. Anything is better than the loan interest. Anything.
Keep your auto-payments in check
If you’re a member of a gym or a health club and you haven’t visited it in years, turn off your auto-payments!
You might forget it or assume that you’ll be coming back soon, but that’s still money out of your pocket.
Only set up auto payments for rent and bills. Even then, always keep them in check every 6 months or when you upgrade or downgrade a service. For anything else, avoid doing it unless you’re really, really, really sure that you’ll commit to it.
Maybe you’re thinking that the auto-payment will entice you to actually work out. Think again. You’ll continue to Netflix and chill while those payments just keep on rolling.
These things are easier said than done, but baby steps, boo. Take it slowly and carefully, and don’t overdo the cheapness. In a few years, you’ll be laughing your way to the bank anyway.
Ask your own question
How did we know to give you these personal finance tips? The data from our poll in which 59% of students cared about the economy/taxes, of course.