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Day in day out, college students are put through significant amount of financial anguish. This is normally attributed to the increase in the cost of living seen in the rising costs of bills, housing, food, higher education, catering for the needs of dependents as well as expenses for other basic things (Financial Wellness, 2019). Moreover, taking student loans can be a looming challenge as time passes. Trying to keep up with all the above financial duties and responsibilities can prove to be very overwhelming. On the other hand, being ignorant will go a long way in increasing the pressure and feelings of fear, stress and most of the times; anxiety.
In college, within the schedule of academics, there are a lot of activities to juggle. Therefore, it would be wise to create some additional time on a daily basis to find ways to enhance financial wellness in order to reduce the stress that comes with being broke. Most importantly, in order to achieve future goals efficiently, establishing smart financial habits is an investment of great value. That being said, it is important to concentrate on financial wellness in college.
Are there any financial management areas you need to expand your knowledge in or focus on? Ex. Saving Strategies? Budgeting?
There are five financial management areas that I would need to focus on in college and they include; budgeting, saving money, student loans, credit cards, and lastly work. To begin with, budgeting involves a strict limitation of spending in order develop good spending habits while saving the extra amount (Caldwell, 2019).
Saving money is a priority in college financial management. Saving money eases the struggle that comes with paying tuition fees and prevents the temptation of borrowing and increasing debt.
Student loans are both helpful and stressful at the same time. There other ways to lower the cost of education other than borrowing. However, student loans may prove to be inevitable and therefore, since student loans will forever follow a student and not forgiven in bankruptcy, it would be wise to only borrow a sufficient amount (Caldwell, 2019).
Credit cards have a great potential to cause havoc in the life a student. Choosing the right credit card account for students is paramount. This is because most companies strive to sign up more college students in order to establish customer loyalty. A student should therefore utilize money management activities such as budgeting in order to ease the struggle of paying off the credit cards fully.
Lastly, working in college is another area of focus in college financial management. Working presents a lot of advantages. It helps a student manage money and enhance their curriculum vitae. In addition, working prevents the urge to borrow since the more one works, the more money they get and therefore no dependency on loans (Caldwell, 2019).
What are some spending habits/hazards you should avoid in college?
There are four main spending hazards that every college student should avoid and they include; new spending responsibilities, poor budgeting, inability to differentiate wants vs. needs, and abusing student loans.
For students who have just joined college from high school, their first time to handle money involves paying for necessities such as books and tuition then carelessly spending what is left, unaware that there are other looming expenses (Reaume, 2016). Careless spending should be avoided and instead, a student should learn to keep an eye out for sales and coupons as well as saving.
Poor budgeting is attributed to students not having a solid plan on how to use their money. This hazard may lead to overspending and bring about borrowing once a student becomes broke. Students would therefore benefit from setting financial goals in this case. Writing down goals is a proven method of successfully achieving goals as it helps one to remember and thus work towards reaching it (6 Common Money Management Mistakes College Students Make, 2019).
Determining needs vs. wants is critical. Most students do not know or rather fail to categorize their expenses by deciding what they need and want. For example, food is a basic need whereas coffee is a want. Sometimes however, a Starbucks latte in the morning may feel like a need. Nevertheless, there’s always an inexpensive alternative for such “wants”; like brewing coffee at home would be cheaper. Knowing and being keen on the difference between needs and wants goes a long way in assisting students to avoid impulse buying and overspending.
Paying off student loans has become a huge milestone for most students because they are at a loss when it comes to figuring out how to source money. This comes after abusing student loans by borrowing more than enough to pay for necessities and then spending the remainder on recreation activities as well as satisfying wants such as huge television screens and designer clothes. Practicing healthy money management habits can be a challenge but through patience and practice, a student can be assured of their financial well being in college.
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