Why Financial Planning is Vital for College Students

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  • College is an exciting time that helps to create your future potential.  However, between partying, and perhaps a little studying, the fact that it’s likely your first time away from the family home may have temporarily escaped you.  But with this new found freedom comes responsibility – in particular, the responsibility to manage your own finances.

    So put aside for now the many distractions, since thinking about your financial affairs is vital not only so that you can get through the next three years, but also to help set things up as much as possible for an abundant future.

    So, let’s talk through some things to keep in mind:

    Successfully Managing Your Day to Day Expenses

    Unless your parents are continuing to pay all your living costs, you’re going to be responsible for all the costs of day to day living.  This includes accommodation, food, utility bills, and of course socializing!  Plus there’s textbook costs too of course.

    Now, you’ve got your student loan, but chances are you’ll need to earn extra money too in order to make ends meet.  So although studying and your social life can easily take up all of your time if you allow it to, making time available for earning money can be very helpful, and you may also find the mental break from campus life to be worthwhile as well.

    Managing Your Debt

    Simply put, unless your circumstances are exceptional, you will end your student life heavily in debt.  This will be mostly comprised of student loans, but also potentially overdrafts, loans, and credit cards, if you happen to qualify for any of those.

    Ending your student days with a ton of unsecured debt can be very stressful, and cause you to take work, or make living decisions based entirely around that, rather than what’s best for your career long term.

    Your Future Potential

    The real goal of college is to make yourself as employable as possible.  And there’s many considerations to take on board here:

    • Have you chosen a degree that really helps your earnings potential?  Some degrees don’t directly lead to careers, but the act of having a degree can very much help you find work.  Now, even if you end your college career with a history degree, you could end up in corporate sales and make quite a go of it.  It wouldn’t be the first time such a transition has happened.  On the other hand, a degree like computer science does lend itself to a career in software development.
    • What are your aspirations for your career?  If it doesn’t directly tie into your degree, how can you make that transition?  There are courses that allow you to move to a different career, for example from whatever your degree may be, into law.  Or perhaps you’re thinking of working for an investment management company like JSF Financial, then you may need to take a conversion course to make such a career transition.
    • You not only need to think about the next few years, but also the next few decades.  Some careers lend themselves to ongoing advancement, if you’re dedicated.  Whereas certain careers, IT for example, often have an age ceiling, and a change of one type or another may then be required to keep earning, and ideally earning well.

    So earning extra money while at university, being careful about taking on debt, and planning for your career goals can all help you to end student life, and begin working life, with the maximum potential.

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