Making Money Moves
Eighteen. The age where most students graduate from high school, start college, and are “officially” on their own. While they might be prepared academically to go to the next level, most students are far from ready to tackle the real world of “adulting” especially in terms of their finances. Parents still hold their grown babies’ hands by paying their bills, co-signing for credit cards and apartments, and rescuing them from one financial crisis to another.
But students, guess what? Your parents are NOT your emergency funds! Now is the time to prepare yourself since these financial responsibilities now belong to you. Your #FinHealthMatters, and if you want to make real money moves, here are three quick steps to get you to the next level:
1. Have a budget! Budgeting isn’t sexy, but don’t let this scare you. Having a budget helps you to plan for your needs and wants. The CFSI shows that 63% of community college students are living paycheck to paycheck. Avoid that added stress, and have a budget in place. When budgeting, you should include everything from gas to trips to Walmart. Make sure that you plan for entertainment and events too. Christmas and birthdays happen on the same day every year, so plan for it.
There are all types of free budgeting worksheets available to help you get started. Don’t let financial burdens get you down. Winning at money is 80% behavior and 20% knowledge. Learn what to do, then go do it!
2. Borrow only what you NEED! Don’t take more than is absolutely necessary. Because while you might think you “need” a vacation, using your student loan to pay for it is not the way to go. Think about it – you’ll be thirty and still paying for that much “needed” Junior-year-vacay.
The way interest is set up, it will take you ten years to pay off a $20,000 loan if you make $250 per month payments. You would need to have a job making at least $28,000 just to make these payments. This isn’t including all of your other expenses. Long story short, are your Cabo memories worth thousands of dollars?
And here’s a tip: after you graduate and you start battling student loan repayment, make a habit of paying an extra $50 a month. Pay it on a different day in the month so that it can be directly applied to your principal loan amount. Every little bit counts.
3. Get a job! *Gasp* Working part time is a great way for you to keep a cash flow for all your wants (i.e. pizza, a trip to the mall) and needs (i.e. biology book and phone bill). Your parents will thank you for staying out of their pockets. It’s okay to consider opening a savings account too, preparing yourself for those emergency situations like a flat tire.
I understand that being a full-time student and working may be challenging. I’ve been there before, but what I learned the most was how to manage my time AND money. You gain a different perspective when you have to earn it yourself. Having these experiences will help you stay on top of your finances and life when serious “adulting” begins.
Here are a few websites or apps to help you get started:
- Mint or EveryDollar apps – Free ways to manage your money from your phone.
- CreditWise app or Discover Scorecard website – Check your credit score for free.
- Indeed website/app – Convenient ways to job search on the go.
Don’t wait until you graduate to start making these financial decisions. Remember, you don’t have to be perfect. You just have to be committed.