10 Financial Tips- Going to College

Will Langan

1. Separate NEEDS from WANTS

The obvious basic needs include food, shelter and clothing. Spend money on these first, whether it be for rent or grocery shopping. After all of your needs have been satisfied (savings included), then and only then should you use your money for wants. Remember to use this money wisely, extra savings never hurts!

2. Get into the Habit of Saving

Saving money is super important! You should save AT LEAST 10-15% of your total income. At some point, you will need retirement money. Also, heaven forbid, you may need emergency money for a variety of problems. Set up an emergency fund. You should aim to have six months worth of income and expenses in this account. There are many ways you can save money; check Tip 3 to see how!


Remember to "pay yourself first". This means you set aside money for savings right after you get your paycheck. Use the remaining money for expenses! This forces you to save and be a more cautious spender.

3. Learn About the Options for Saving and Investing Money

There is no shortage of options when it comes to saving and investing! By educating yourself on saving and investing, you can better choose what options work for you. It is important to become familiar with what you are comfortable with. Are you willing to risk it, or do you want to play it safe?


Savings:

-Savings Accounts

-401k/ 403b

-IRAs

-Money Market Accounts


Investing:

-Stocks

-Bonds

-Mutual Funds

4. Prepare for Your Career

If you have a future profession in mind, strive to get there. Map out the expenses it will take to get there and how you plan to pay for these expenses. How much will college or training cost? These are important questions to ponder, as you may have to pay off loans. Also consider how much you plan to make per year. Doing this can help you determine how long it may take you to pay off loans or help you decide which loan is best for you. You don't want any major financial surprises along the way, and considering this tip may help prevent them.


Remember to be a student FIRST. Your hard work in school may open new doors for you or allow you a higher payed job. Finances are important, but don't let them dominate your life!

5. Use Loans as a Last Resort

Loans can be a fantastic tool in your financial tool belt. But like a broken tool, or a tool that no longer serves a purpose, loans can become a giant burden. They put many great people through college, but they also put many great people in debt. Plain and simple, no one wants to be in debt. Therefore, before asking the bank for a loan, make sure you absolutely NEED the loan. Can your parents afford to put you through college, and are they willing? How about grandparents?

6. Avoid Credit Card Pushers

Teens and college students are constantly targeted by credit card companies. Why? Because the companies know teens will blindly sign up for their credit card, and eventually end up in debt. Debt means more profit for the companies. Too often teens are swindled, putting them in debt that will last for years. Late fees? Interest on late payments? Who knew?! NOT TEENS! And that is the problem. It is an evil system you need to keep an eye out for.

7. Take Control of Your Credit Card

This can be done by...

1. Keeping only one major card. Multiple cards can create confusion and debt if not used properly.

2. Look for a card with the lowest possible fees. Try to find a card that won't throw change ups at you with fluctuating fees and interest rates.

3. If you can't pay for something right away, DON'T BUY IT. If you don't pay in full at the end of the month, the money you still owe will be added to big time interest. You SHOULD pay in full at the end of every month.

4. Pay on time! Late fees can add up and be a hassle. If you're late, you have yourself to blame and no one else.

5. Don't use cash advances with your card. This is what ATM cards are for. Fees tend to be much higher for credit cards when making cash advances.

8. Build Good Credit

It is necessary to maintain a good credit score when young, so you can take out loans for big purchases in the future. Cars and homes aren't cheap, and banks will not hand out loans to anyone. You need to prove you are trustworthy, and that you are good for the money. To show you're trustworthy, pay bills on time, don't carry an absurd amount of credit cards, and don't bounce checks. By doing these three things, you can help map a great path for yourself while young.

9. Create a Budget and Stick to It

Budgets are great tools to help you prioritize your spending. A budget covers ALL expenses, not just some. To start a budget, track your expenses for a minimum of 3 months, keeping all of your receipts. Add up your needs expenses, and subtract them from your income. The remaining amount is what you can spend on wants or save. Make sure to tell those close to you that you're sticking to a budget so you don't get sucked into more costs by others. This is partially covered in Tip 10.

10. Resist Peer Presure

Your friends may force you to spend. Going to the movies, bowling, mini golfing, eating out. It all adds up, and before you know it, you exceeded your budget. Its ok to tell your friends no sometimes, you won't miss out on much. By telling your friends you're on a budget, they will respect you and your finances.