As a college student, you are going to learn a lot about personal finance regardless of your major. You may have a drive to learn about bookkeeping and accounting or you may want to keep your head stuck in your organic chemistry book. Either way, you will be thrown into a world of personal finance and most likely will not know what to do with it all.
Looking back, I wish I had the knowledge that I have now about personal finance. Having uncertainty about your finances can lead to poor financial decisions, which likely will affect you negatively in the long run. Here are the five best personal finance lessons I have learned throughout my college experience.
Set a Budget, Period.
Budgeting is one of the keys to successfully managing your personal finances. A budget helps you live within your means and breaks down the tendencies to spend more than one can afford. This is a great first step to maintain financial stability.
Set Specific Financial Goals.
Goals give you purpose, accountability, and momentum. By setting specific financial goals, you are telling yourself that you want to complete something in a certain amount of time, holding yourself accountable and giving yourself momentum to keep moving forward for a specific purpose.
Have an Emergency Fund.
You never know when you’re going to need $500 because your car just broke down or $75 because you need to purchase items for your chemistry lab. No matter how big or small the emergency may be, it is essential to have an emergency fund for those situations.
Save, Save, Save. No Exceptions.
The day you obtain employment that allows you to be eligible for a 401k, contribute and match your employer’s contribution. No exceptions. IT’S FREE MONEY. It does not matter if you are 21 or 41 and able to contribute to your retirement, you should always contribute at least the amount that your employer is willing to match.
Learn About Your Credit.
Your credit is based on a variety of things. The best thing to do is make your payments on time, every time. What you do now can affect your credit score far into the future. It is of the utmost importance that you think about how financial decisions you make today can affect you in the future.
Keeping your personal finances in check is crucial while in college. Setting a budget and financial goals may seem like simple beginners’ steps, but can lead to great financial success. Preparing yourself with an emergency fund, a 401k, and taking action to ensure your credit remains in good standing will only benefit you in the future and make life a little easier.
You don’t have to study finance to be financially successful; you just have to make the right financial decisions.
Are you in repayment of your student loans? Would you like to make sure you’re on track to pay them off as fast as possible and pay the least amount of interest? Give LSS a call at 888.577.2227 for your free and confidential student loan counseling session. We can also create with you a realistic spending and savings plan.
Author Darby Eilefson is an intern with LSS Financial Counseling and recent College of Saint Scholastica grad with a degree in Applied Economics and a minor in Finance.