Having financial competence is key to enjoying life. Unfortunately, expenses that come with college years can be very financially trying on students that are not bringing in significant income at this stage of life. Whether you’re still in college earning your degree, or a full-time professional looking to improve his/her financial situation, here are seven important financial moves that you should make to help get you out of debt and fill your pockets with more cash:
Start saving and investing now. The sooner you start managing your finances responsibly, the more money you’ll accrue over time. This is thanks to a simple economic principle known as “compound investing”. Billionaires including Mexican businessman, Carlos Slim Helu, attribute their financial feat to this one fundamental step.
Develop Self Control
Having self control is perhaps the simplest way to building wealth. If you don’t know how to manage your own cash, it’ll be almost impossible to save any of it from unwise and impulsive purchases, whether it’s an expensive trip to the Bahamas, eating out, or monthly subscriptions to services you don’t really need. And rather than rely on your family and friends to keep you in check, you should take the initiative and build your self control from the inside. Read personal finance books and develop habits that help you avoid spending money unwisely.
Make a Financial Calendar
If you lack the memory and self-discipline to remember to pay your taxes and credit just in time before the late fees hit your account, set up reminders and notifications on your phone’s and/or laptop’s calendar. Every time you use your credit card, finance a new phone or car, or take out a mortgage for a new house, make sure to update your calendar as soon as you can. Set a noticeable ringtone and notification message for each calendar event so you don’t miss it.
Work on Your Credit Score
The importance of good credit cannot be overemphasized. Nowadays, you need credit for just about any adult purchase you’ll make, from buying your first house to financing your first car. And while there is the option to pay cash in full, it can be more expensive as opposed to financing it. Work towards getting your first credit score and then build on it. Few ways you can get a credit score is by signing up for a store credit card, like Macy’s or JcPenney, being a cosigner of a car financing deal, and working in a job that pays on the books. If you have a low score, get credit help from experts who can advise you on how to improve your credit score without affecting your personal finances.
Invest Any Spare Change
With apps, like Robinhood and Acorn, anyone can invest with whatever amount they can spare. Gone are the days when investing was reserved mostly to people who had a modest amount of money to spare, such as retirees. However, today, young adults can also start investing their savings rather than park it in a bank account that earns you a dollar or two after a year. Take charge in investing by signing up for a Robinhood account and looking for dividend stocks.
Take Care of Yourself
Medical bills can cost you thousands of dollars in debt. Take care of yourself so your savings doesn’t end up paying for medication, treatment, checkup, or surgery. Eat a well-balanced diet, get adequate rest, and take multivitamins and supplements.
Get What You Can For Free
Free stuff is everywhere, from the tap water you can drink instead of soda to the free trial accounts on subscription services like Netflix. Have the time and patience to find these Easter eggs wherever they may be.
These are seven of the many financial tips that college students and young adults should know about. Although it sounds like billionaires have a secret sauce or Holy Grail system for making money, truth be told is they rely on these same principles to build grand amounts of wealth.