Being a student is a fun and challenging stage of life. There are late night cramming sessions fueled by coffees and pizza deliveries. These are further fueled by the hope and dream that one day the stress of learning will minimize, and the joy of earning will begin. No one wants to make their college or university days all about money, but it is important for students to pay attention to their spending.
There are some easy tips to improving finances in the following list, which will save post-graduation financial strain:
1. Be Open to Saving
When the loans start rolling in, whether from the bank, government, or parents, it is easy to want to spend them all. Being a student does not have to mean being always broke. Make a habit of putting 10% of all income away in a savings account and leaving it there. These funds will grow over the course of the studying period, if invested right.
2. Open an Investment Portfolio
The 10% does not need to sit in a bank account untouched with minimal interest rates. Take it and find a financial advisor to help maximize the profits. Make this into a learning experiment for when the real salary money starts coming in. Investing early is very important if you want to improve your financial future.
3. Refinance Your Student Loans
With interest rates as high as 7.9%, student loans can create a high degree of loss over the period of repayment. While on one hand, the government provides flexibility with repayment if needed, on the other, the price at which this safety net comes may be too high for some students. Students should consider refinancing their student loans through a private institution to reduce their interest rate if they plan on making their payments on time.
4. Eat and Drink at Home
The best thing a student can do while studying is to invest money into eating everything in their own kitchen. Even if this means buying a coffee maker with those loan funds, saving 2 to 4 dollars each cup of coffee will well make up for the cost of even a good quality $50 machine. The same goes for drinking alcohol. Think of each glass of alcohol consumed as costing at least an extra $5 even on student nights at the bar. It will be more financially solvent to gather friends and play those college drinking games at home.
5. Test out the Waters
Being a student is a great time to practice being a financially responsible adult. Try to do a few mental exercises a week where the future is envisioned. What does 5 years down the road look like? What type of house, apartment, etc. is called home? And most importantly, how does this independence feel? Imagining the level of responsibility of making one’s own money is a good way to start owning even future tense decisions.
While this is not an exhaustive list, and so much more could be said on the topic, these 5 tips will really help students get into a healthy mentality regarding money and teach them to improve their finances. There is nothing worse than students losing this window of time to also learn financial lessons as well as academic ones.