There are a lot of advice articles out there imploring college students to start building up credit, thinking about retirement, and getting their finances in order as young adults. However, there are not a lot of articles coming out that explain why these students should care about it anyway. When in college, the only priorities are grades, partying, and survival. Here are some of the reasons that starting good financial habits are part of that essential skill of college: survival.
Good Credit Will Carry You So Far
While opening and maintaining trade lines is not the most fun thing that college students could be doing, it is also one of the things they will do in college that will help them be more likely to be able to buy their first home. Establishing credit now is crucial to having a healthy credit score in the long term because a part of how your FICO score is calculated is dependent upon length of credit history, so starting earlier will help strengthen that aspect of your credit score.
Budgeting Now Will Continue Later
It takes twenty one days to start a habit that you will stick to. This includes everything from addiction to good financial habits. Rather than addiction, college students should be working towards establishing solid financial habits like making and sticking to a monthly budget. When students start embarking on tasks like this now, they can continue practicing these healthy spending habits later when there are more expenses for them to keep up with. Students will appreciate having the appropriate amount of money set aside in each account when unexpected costs arise and they don’t have to worry about going into debt to pay for it or about taking out a loan.
Planning for Retirement Now Means You Get the Retirement You Want
So many Americans don’t even give a thought to retirement until they are at their careers’ ends and it is too late to start saving so that they can have enough money to cover the cost of living. If you start planning while you are still in college, you have the chance to have the retirement of your dreams in a house that you want and can easily pay for. This is Americans’ number one financial regret, and one that can be easily solved by starting as soon as you are even in college. It can be hard to set money aside that you won’t touch for many years, but it will be worth it once your income becomes fixed.
Career Tool Building is Key
While you are still young, learn everything that you can because every skill is a marketable skill in some capacity. Working the odd job here and there to pay the bills won’t just help you pay the bills, but may also come in handy and could land you another job in the future. These tools do not include just specialized skills like stone masonry or blacksmithing, but the skill of networking and the skill of simply being professional with peers is one that no class will outright teach you, rather the world of work experience will teach you all of that and so much more.
Although not the most exciting part of college, good financial habits are some of the most important things that a college student can learn. Good financial habits open more doors for the future than they close in the present, and they are always worthwhile for the student to try before closing themselves off to the idea of practicing good financial habits because of its negative connotations.