Entering college is an important time in life, and adopting positive habits early on can help lead to success. Learning how to manage your finances in advance can help set you up for financial gain for the rest of your life. By starting with short, manageable financial goals suited for college students, you can gradually work towards long-term goals and save for future milestones, like moving somewhere new, saving for a house, or going on your dream vacation.
While college can teach you many different skills, you can utilize the need for scrimping and saving money to help build a financial literacy foundation that will carry you through the rest of your life. Read on to learn how to create short-term financial goals for college students.
1. Make a Budget
By setting up a budget, you can track your spending habits and understand your money flow better. You can visually see where the bulk of your money is going, such as paying rent, car maintenance, or food. It can also help you understand where you need to cut back and reassess expenses.
To make a budget as a college student, start with what you know will be a recurring cost. This could be tuition, rent, class supplies, phone, car maintenance or public transportation, toiletries, and food. However, living on a budget doesn’t mean you can’t have fun. After establishing your monthly expenses, look at what varied costs could come up. This could be considered your spending money. Make sure to set some aside for any activities you like to do, allowing some flexibility and confidence in your budget. Next, revisit your budget regularly to confirm you’re on the right track. If you realize you need to make adjustments, do it sooner rather than later to prevent overspending.
2. Create an Emergency Fund
A safety net is a sure way to prepare for emergencies, especially when money is already on a budget. To prepare for unexpected emergencies, start setting aside a part of your income (consider between 5 to 10 percent). Building an emergency fund can be used for:
- Injuries or hospitalizations
- Car repairs
- Job loss
- School or equipment expenses
If you get to the point where you feel comfortable with your emergency fund, you can begin to place your money into other areas, whether that is paying down debt or depositing money into a different type of savings account.
3. Get a Job You Can Grow From
Working while in school can present a challenge for your financial goals as you juggle classes and school work. Adding a job to the mix can seem daunting, but there are many advantages.
For example, having a job will:
- Enable you to gain valuable experience while in school
- Help you stand out when entering the work field in your desired career
- Provide experiences to draw upon during an interview
- Make it easier to manage money and monitor your budget
If you’re not able to attend college and work, picking up a job during the summer can be another great way to save. This will allow you to build up savings for college and any expenses that come with it.
4. Invest In Your Financial Literacy
College is a great time to learn and develop financial skills. Along with managing a budget, you can begin understanding the true value of money and work towards achieving long-term goals.
Consider taking a personal finance course during your time at college. A class will offer structure and support as you learn if financial classes aren’t offered in your college, or you don’t have the availability in your schedule for it, reading personal finance books can help your mindset grow. Blogs, podcasts, and TED talks can also be great resources for improving financial literacy.
5. Use Financial Planning Apps
While it’s a good idea to have your bank’s app downloaded on your phone, there are also apps designed with the sole purpose of helping you budget and save. Try out a few different apps and see which one suits you best. Some may be best for helping you achieve your short-term financial goals, while others will help you in the long run.
When it comes to financial literacy and planning, there’s always more to learn. It’s likely that your goals and income will be ever-evolving and need updating as you go through life.
6. Graduate With No Debt
If you need to take out loans for college, make sure you do so responsibly. Ensure that you have the ability to pay it back by a reasonable time so that you don’t have debts preventing you from your long-term financial goals. By setting up a repayment plan, you can plan ahead and be in a good financial place after graduation.
Financial Goals Are Worth It
When you start learning financial skills early and establish short-term goals at the beginning of your college career, you’ll be able to better navigate through college and beyond. By using these financial goals for college students today, it can lead to a better financial situation down the road.