Money Management Tips
Use loans as a last resort.
As a high school student heading to college, it is important to keep in mind that student loans will put you into debt. Try to look for scholarships and grants rather than borrowing money. Loans must be paid back with interest, and can therefore end up costing you thousands of dollars more than the loan itself. Grants and scholarships, however, are "free" and do not need to be paid back. Summer jobs and money saved in previous years can go a long way in reducing debt after graduation.
Make school your first job.
Although college is expensive and working moderately while in school is suggested, do not let work interfere with your education. Focusing too much on work while in college may cause grades to slip; in this case you may not even graduate and be forced to work that job for many years to come. College is about furthering your education with the hope of getting a better job in the future. Such plans may be jeopardized if you let work interfere with school.
Take time now to prepare for your career.
It is best to get a jump start on your future as early as possible. In addition to preparing a resume, refining interview skills, and attending career fairs, consider taking part in internships or job shadowing opportunities. If you are planning on becoming a doctor in the future, a job shadow or internship may give you insight as to what the occupation really entails; it is better to find out now that you don't like working with patients rather than after attending several years in college and medical school. Time and money may be at stake so, at the very least, do some research or visit the career center to gain a better understanding of possible careers.
Plug everyday spending leaks.
As a student heading to college, every dollar saved counts. College is incredibly expensive and will most likely leave you with some sort of debt to pay back. Small, unnecessary purchases made today will add up over time. That is simply money that could reduce your post-graduation debt. By limiting your Dunkin Donuts trips, cutting out unnecessary visits to the mall, and spending less on gas, you may be surprised at how much you save. Put this money towards college and you will undoubtedly benefit after graduation.
Build good credit.
Credit will ultimately play a huge role in your future. It allows you to take out loans for things you may need, or want, in the future such as a car, house, boat, etc. Without good credit, banks may not issue you the loan you desire for fear you will not pay it back.,Establish good credit early. Pay your expenses and payments on time, don;t bounce checks,and apply only for the credit you need. Establishing good habits early will allow you to earn good credit and secure your future.
Get into the savings habit.
Learning to save and invest money may seem complicated and difficult to grasp, however once a basic understanding is established you can put your money to work. If you can learn to save a little at a time, you can invest early and maximize your money. Even small amounts of money saved will add up to a huge sum over time. The earlier you save and invest, the more time you give your money to grow. Be sure to capitalize on such an opportunity, even if you can only set aside small amounts each month.
Create a budget and stick to it.
Create a budget to keep track of and manage your spending. Budgets give you an idea of how much money to spend and where to spend it. Perhaps the most important aspect of budgets is their ability to allow you to save for your future. Start saving as early as possible and make it a priority. Failing to save money now will not make you more in the future, however a few small deposits each month into your savings account could have huge benefits in years to come. Budgets limit your spending in places where it is not needed so you can spend it on things that are needed and will help you in the future. Keep in mind that discipline is key here; a budget is only advantageous if it is followed.
Learn the power of compounding.
Money sitting in your wallet or under your mattress is money wasted. Do something with it! By putting this money into a savings account at the bank, you give your money a chance to compound, or earn interest. Essentially your money is making money! Put as much money as possible into an account as early as possible. This will ensure you earn an optimal amount of interest. It is important to start early; this gives your money time to compound and grow.
Pay yourself first.
One of the most important factors in establishing a secure financial future is to pay yourself first. Put money into your savings account before you spend it on other things. If you routinely take money out of your paycheck and put it into your savings account directly, you will hardly even notice it is gone. Doing so will result in huge benefits in the future. These small deposits will result in a huge sum of money by retirement. Make sure to include savings as a part of your budget; prioritize paying yourself first.
Net worth is not the same as self worth.
Money is not everything. Do not let the amount of money in your bank account dictate your own self worth. It is not about how much you make but rather how much you save. Manage your money well and do your best to optimize its growth, but do not lose sight of your values, family, and friends.