Financing is probably the last thing on your mind as a carefree college student. Instead of worrying about income and expenses, you’re most likely more focused on having fun with your friends. And that’s totally normal. College is a time to find your passions, get to know yourself a little more and experiment and explore. But, unfortunately, with the rising costs of education, money does play a big part in student living. In fact, the financial decisions you make in college could impact the rest of your life.
The good news is you can avoid creating a mountain of debt with the right mind-set and financial strategy. Want to know more? The following are some financial tips for young adults.
Student loans have become part of going to college for millions of people in the US. Without them, it’s almost impossible to finance rising tuition costs and living expenses. It makes perfect sense to take out a student loan from a private lender in a lot of cases as you can go onto get a graduate degree and earn more money than someone without a degree. Be smart with your student loan and be prepared to make the repayments on time after you graduate and you’ll never regret applying for one.
Get Health Insurance
Yes, health insurance is not just for your grandparents. While you’re likely young, fit and healthy with no medical conditions, the cost of hospitalization is so expensive now that everyone – irrespective of ages – needs to have cover. Premiums vary in price so be sure to shop around.
Avoid Credit Card Debt
A credit card will be the perfect tool in a couple of years when you’re earning money and you’re able to make repayments with little stress. Now, when you’re studying and you’re tight on cash, it’s best to avoid credit card debt. The interest rates can be very high and you run the risk of ruining your credit score if you’re not smart with your spending.
Learn All About Financial Planning
You might think that you just need to spend less than you earn to be good at financial planning. And while this is the basic principle that’s at the core of the concept, you need to delve into the fundamentals a little deeper. Educate yourself on how loans work and learn about mortgages and what specific terms need to be met before getting approved. Know how to budget effectively and, more importantly, learn how to maximize the benefits of budgeting so you can have full control over your money at all times.
Get a Job
If you have time to spare in the evenings or at weekends, why not do something useful and get a part-time job? You’ll be earning more money so you can be more financially secure and you’ll be getting real-world experience in the workforce. It might seem like you’re missing out on all the fun in the beginning but trust us when we say you’ll be much happier waking up on a Sunday morning with a fresh head and a healthier bank balance.
Cut Back on Monthly Expenses
Your monthly expenses are going to be higher than you think. Yes, you won’t have rent to pay and your fees will all be paid with your student loan but that doesn’t mean you will be living for free. To ensure you never get into too much debt, it’s always a good idea to cut back on your monthly expenses where possible.
If you have a subscription that you’re paying for but you rarely use, it’s time to cancel it. Choose to cook at home rather than go for expensive nights out. Have a few beers with friends in the backyard or local park instead of booking a table at a swanky club. These are all ways to save money without making a huge difference to your everyday routine.