BY SOFIA MENDEZ
Throughout our lives, we must make decisions that are key to our finances. Each financial decision we make will impact us and shape our future, so having an analysis about what to do at an early stage is very significant. Understanding how to make the best financial decisions in adolescence is an important concept to grasp and when in college, it provides tranquility for one’s future self.
While a daunting task, becoming financially independent is monumental during college. Becoming independent gives students the chance to figure out who they are and what they want without relying on the pressures of their parents or society as a whole. Studies have shown that independent growth is developed especially in college years. Having independence is important because it develops levels of self-awareness and self-motivation as college students have the freedom to make their own decisions and learn from mistakes. Here are some tips for financial independence during those four years at university.
First, create a budget. It is very recommended to map out the various streams of income, including the money one will provide, the income generated because of a job and the money that directly comes from loans, grants, scholarship and other types of financial aid. It’s fundamental to categorize and create a spending plan, as it will always make one aware of the money they have for their needs. With a budget, students are able to know what is affordable and what is not, granting them the ability to then analyze their recurring expenses.
It’s fundamental to categorize and create a spending plan, as it will always make one aware of the money they have for their needs.
In addition, students must always remember to choose their major and college carefully. Going to college is a huge investment that involves money and time. After graduating from high school, take into consideration where you want to study for the next four years and whether spending tens of thousands of dollars of debt is truly worth it. Take into consideration the job prospects you can have with your degree choice and an estimate of what your income will look like.
With this, another factor for financial independence in college is trying to minimize student debt. First off, students must always spend on the right things before going off to college. Student loans are money borrowed from the government or a private lender in order to pay for college. However, the loan has to be paid back later, along with interest that builds up over time. Now, with this loan, students must always remember to use them preferably for their beneficial resources like tuition, room and board, books or other educational fees. By putting the money towards things that matter in the long run, unnecessary debt could be prevented. Furthermore, an easy way to minimize student debt is by getting a job. A job can provide students with an additional source of income that they can use to invest or make early payments to their student loans, possibly saving them thousands in student loan interest when graduating.
Setting money boundaries could also help college students grow financially independent.
Setting money boundaries could also help college students grow financially independent. Students should make financial and spending limits for themselves and start investing in the most needed things. Carefully investing your time and money in something, while possibly not providing an immediate return, could potentially give you tremendous value later on in your life. Setting a specific spending limit for each month or even each week could make a difference in the long run as savings amounts could increase. This makes students realize the things that are necessary and unnecessary in their lives.
Finally, prepare everything well with manageable time. It’s very important that whatever students decide to do, they do it for a reason. It is crucial to evaluate all the variables, possibilities and context when it comes to finances, and to do so in a timely manner.
So with this, always take time to think, seek information and receive advice. Following these tips could bring you steps closer to becoming a financially independent young adult.
Photo courtesy of Concordia University Ann Arbor News