Finances are some of the things that drive your possibilities in this world. Can I go on a month-long trip overseas touring Europe? Probably not. Because my finances are not going to allow me to do that. There are many aspects to finances but for now we will only be discussing a few of the things that are important to get into the habit of while in college.
Income: For starters you are going to need a job! Try to find a job doing something that you enjoy or something that will be worth your while. Sometimes if you have a part time job you would be able to do two part time jobs to help with extra money. If you are having trouble making a lot of money just working, try finding a side hustle that you enjoy, sell things on facebook marketplace, poshmark, or even ebay to help with some more money.
Budgeting: Now that you have some income available to you, you should get into the habit of budgeting your money to maximize every dollar. I normally set my budget the day I get paid to ensure that I have a plan for my money. For beginners I just have a piece of paper (nothing fancy) and I list out all of my expenses, bills, and memberships, then what I do is I portion out my money into their designated category. Some category ideas could be (Rent, Savings, Water bill, Car payment, Groceries, Fast food, Shopping, Things-I-forgot-to-budget, Gas, Car insurance, Phone bill, etc) you can customize your categories to fit your specific needs and wants. Once you have your categories ready and listed you can then start on adding money into the categories you need them for. The goal is to budget every single dollar that you make and be sure that every dollar has a job to do. For example, if you make $100 then you want the total of all your categories combined to equal $100.
Student loans & Scholarships: Student loans may or may not be a good thing for some people. To ensure that a student loan is worth your effort, it is best to ensure you are studying to get a well-paying job that can help you to increase your income and pay off your loans in the future. For now, it is well worth your while to search for scholarships and take the time to actually apply to them. Seek out some that have a big payment and some that are smaller, this will help you to diversify the types of scholarships you apply for.
Savings: Everyone knows the saying “Pay yourself first” which means that when you get paid, you automatically put a set amount or percentage of your paycheck into your savings for the future. For me personally, I do not have many bills to pay so I am able to save more money while I’m younger to use when I’m older and I encourage you Monarchs to also try to save more and live below your means. Many people suggest that you should put 10% of your paycheck into a savings account to have for the future/as an emergency fund, this is a good starting place to which you can try to up the amount each paycheck to live below your means. If you do not have a savings account opened yet, now is the perfect time to do so, so you can start your journey to financial freedom!
Investing: Investing is a great topic to talk about, and many people have different opinions when it comes to the many different types of investing. There are single stocks that you can buy, investment accounts that have mutual funds, or even a retirement account funded by different things. The difference between all of these is the risk that is associated with the investment itself. If you are looking into getting a retirement account I would recommend looking into getting a Roth IRA which doesn’t tax your money when you pull it out at retirement. I am no expert in investing so in order to get more information I recommend finding a credible and reliable source to further your knowledge of investing!
Credit cards: Credit cards can be tricky at times, when you do decide to open your first credit card, I want you to make sure you are paying off your balance in full by the due date! This will ensure that you won’t be charged more than what you originally paid because you won’t have any interest charges added on. In this case, interest is a bad thing that means you owe the company extra. A good rule of thumb for credit cards is to only use 30% of your credit card limit, and this will help to raise your credit score.
All in all, it is really important to have your finances in order now rather than in the adult world, it is best to learn how to manage your money and get on the right track to financial freedom. If you take all of the steps above now and learn how to do everything I discussed here, then you will be more than ready to take on the real world Monarchs, Reign On!!
