What I wish I’d known about finances in college
When I started at the university, I was a little nervous about what might transpire. I thought I might be biting off more than I could chew. I should have known that I had little to worry about, but there were a few things I wish I had known, or at least thought about, before entering college.
Who is paying for college? Many have their undergraduate education paid for by parents, scholarships, and/or loans in their name. If your parents are paying for your education, be careful not to fail any courses. If you fail a class required for you degree, you will have to take the class again, paying for it twice. It’s not worth it, particularly, since it’s usually difficult to outright fail a class. Paying for college yourself supposedly give you ownership of your academic decisions while in school, but if you’re in a situation where you don’t have to worry about affording, your own tuition, then consider yourself lucky. I am grateful that I didn’t have to pay for college education. It allowed me to focus on my education and extracurricular resume-building activities in my field rather than focusing on earning income to afford tuition. I held various part time jobs that provided me with a little extra cash, but spent it just as fast as I earned it.
Open A Roth IRA. These retirement accounts were brought into existence about 16 years ago. If I had a way that I could put money away for retirement in a tax-advantaged account wile I was in such a low tax bracket, I might have taken advantage of the opportunity. Then again, I might not have. It’s hard to imagine retirement before you’ve officially begun a career, but its harder to argue with long-term investing in the sock market-even in these times of economic uncertainty.
Like many, I played the “stock market game” in elementary school. by the time I entered college, I probably knew only a little more about investing, but my interest lay elsewhere so I did not particularly think about having a secure financial future. I’m not going to go on and on about the power of compound interest here, but suffice to say-it’s incredible when you start in college.
Avoid credit cards – the credit card companies are (still) vultures on college campuses. These companies set up tables outside the dorms with applications and free tee-shirts, enticing sib-fashionable freshmen (like myself, at the time) to sign up. Although I escapee relatively unscathed, having a credit card without a job is asking for trouble.
One particularly sneaky aspect of college geared credit cards is the introductory offer. Even with the recently passed CARD act, the fine print on these deals are heavily weighted AGAINST the college student, and (of course) in favor of the banks, so be a savvy student.
Use credit cards sparingly – pay all balances in full – get the best dal on a checking account – start saving – keep track of your spending – set a limit on entertainment- shop at second hand stores – keep an eye out for free money – get a part time job with tips – walk or ride a bike, don’t drive – look for student discounts and don’t eat out all the time.
Had I known what I know now about compounding interest and the tendency for the stock market to increase over time, not just theoretically but from experience, I’d be in an even better financial position right now.
and it’s not about having more money, it’s about having more options for doing the things we like to do.