College Student Money Tips: What You Should Know by the Age of 20
Today, almost anyone can live a fulfilling life and have just as much money as they need. But the problem is, many young people simply don’t know how to manage their money. Many of them never got a chance to learn about personal finance while growing up while some of them did but simply didn’t care enough about it when they were kids. If you feel like you belong to any of these two groups and you’re just starting college, there’s no need to panic as you can still learn everything you need to know in order to get on track financially. In fact, we came up with 10 college student money tips you should check out before you reach 20.
Learn how to do your taxes
If you get a job right after you finish college, you’ll have to start doing your taxes and that’s where problems might arise. Taxes can be quite complicated but the gist of it is that you have to pay the portion of your income to the government. You’ll usually do this periodically throughout the year by having a portion of each of your paycheck deducted. While this is what taxes are all about it might still be a good idea to check special guides on how to do your taxes.
Know how to work out your budget
One of the most important things you’ll have to do once you start working is how to do create your budget. This means you’ll have to keep track of both your income and your expenses. Once you get a hang of it, there won’t be any need for you to worry about your money since you’ll know exactly what’s coming in and where it’s going. And if you know exactly how much you’re spending on things such as mortgage and bills, you’ll also be able to figure out how much you can spend on something for yourself.
Know how to prioritize
Prioritizing plays a huge role in how you manage your money. You don’t want to find yourself in a situation where you’ve spent all of your money things such as new clothes or a new hard drive for your PC. Instead, what you should do is first deal with things such as your bills and only use what’s left of your money for things you don’t necessarily have to get at all costs.
Always set your goals
Another important tip to have in mind is that you should always set your goals when it comes to personal finances. This means you should know exactly how much you want to earn and how much you want to have left at the end of each month. With carefully crafted goals, you’ll be more motivated to work hard and spend your money responsibly, which is always a good thing. We recommend writing down your goals and keeping that piece of paper where you can see it every day.
Learn how to invest
Today, there’s plenty of opportunity for investing. However, if you don’t know much about it, you’ll hardly be able to make any money off of it. Therefore, it might be a perfect time for you to start learning about making investments and options you can go for. Just bear in mind that it isn’t advisable to start investing until you have a steady income and you’ve paid off all of your debts. You might even end up finding yourself in it for the long haul.
Have an emergency fund
There’s no need to say that something can always go wrong. And having some money set aside for emergencies can be a real lifesaver. Moreover, creating your emergency fund isn’t going to be difficult. You can figure out a financial goal for your fund and set aside some money every month until that goal has been reached. Trust us, you’ll be glad to have a fund like this in case you need to pay for medical bills or an expensive car repair.
Learn about health insurance
This might also be the right time for you to start learning more about health insurance and get some. Health care expenses tend to be huge and you don’t really want to find yourself having to pay for these. Luckily, health insurance can help you be prepared in case something happens to you. Dealing with medical issues is never easy but with health insurance, you at least won’t have to bother with the financial side of it.
Use credit cards responsibly
Chances are you’ve heard stories about people who got their first credit cards once they started college and just went crazy with them. This is definitely something you should avoid doing if you don’t want to find yourself in debt. Instead, what you should do is use your credit cards responsibly. This means you should use your credit cards only for things you can buy in cash as well or at least try to pay your balance off in full every month. This way, you’ll build up a good credit score which might help you get a loan in the future.
Start earning some money on the side
Just because you’re at college it doesn’t mean you shouldn’t start earning money. Luckily, today there are plenty of ways you can earn some money on the side while still being focused on your education. For example, you can now make money online and work from the comfort of your home, when it suits you the most, perhaps in a study break, which would be an ideal way to get your thoughts off the test material. There are online jobs, such as doing paid online surveys and freelance writing, which might be exactly what you’re looking for.
Think about the future
With all the things we mentioned above, you probably already get it that you should always think about the future. Basically, a small change you can make right now might end up being hugely beneficial for you in the future. Therefore, planning for the future no longer means you should get up in time for class tomorrow but you’ll have to look a little bit further ahead than that. Every time you have to make a financial decision, think about how it’s going to affect your life in the next couple of years.
Whether you like it or not, learning how to deal with money is an important part of being a responsible adult and you’ll simply have to it. The 10 tips we mentioned above should help you prepare yourself for the life you’ve always wanted.
Victoria is a Digital Marketing Strategist. She works with driven, creative, and passionate entrepreneurs and small business owners that want to bring their visions to life. An enthusiastic writer who follows latest marketing and technology trends to get a glimpse of the future.