Many young people find themselves stressed about personal finance due to a plethora of factors; however, it’s important to keep a strong grasp on finances sooner rather than later.
Even at a young age, knowing how to save, invest and, spend properly can be a valuable asset that not enough college students are educated on.
Saving
I know that I didn’t have a personal savings account until about a year ago. I, like many people my age, did not understand the importance of keeping up with my savings.
If you’re in a position to save, it is so important to start building the habit early enough so that there is a well of money to draw from during difficult times.
It’s extremely easy to just spend whatever (little) money you’re making in college. Experiences are valuable, as well as spending money on necessities and occasional wants.
However, I’ve found it beneficial to develop somewhat of a scarcity mindset surrounding the money I make. Chances are the thing I want to buy is not going to disappear overnight.
There’s plenty of time to come back to the things that you want later when you have enough money. A good rule of thumb is to never buy anything if you can’t afford it three times over.
Also, many financial institutions allow you to set up automatic withdrawals from your checking account to your savings account. Even $20 a week can allow you to save about $1,000 a year.
Retirement
It’s not a secret that it will continue to become more difficult to retire as more time passes. There just isn’t enough emphasis on social programs that allow Americans to retire.
Fortunately, there are a few steps you can take to protect yourself and your future as a retiree. For me, it was opening up a Roth IRA account with the help of a financial advisor.
Every month, I put a certain amount of money into the Roth IRA, and by the time I am 59 years old, I will have enough money to retire.
The solution will be different for everyone, but I prefer a Roth IRA since it is a pre-taxed solution and there are no contribution age limits.
Even if you are 18 to 22 years old, it’s never too early to start thinking about your retirement era; and, unfortunately will capitalism, it’s our only real time to relax.
Establish your credit
Personally, I always had a negative connotation with credit cards, I thought they were a scary mess and I wanted nothing to do with them.
Unfortunately, many things in life require a good credit score for you to participate in them. These things include buying a house, car and really anything else.
Starting a beginner credit card is not as difficult as many people may guess. Most banks have low entry requirements for beginner credit cards.
While having a credit card is a huge responsibility and can go wrong easily, it can be a powerful tool when used properly.
Building strong credit is one of the best tools you can have in your kit, it has the ability to open and close doors entirely.
Basically, with great power comes great responsibility.
Personal finance can be, or can seem overwhelming; however, it is important for college students to start thinking about it now before life gets too intense.