Nowadays it’s not uncommon to hear college students speak about finances and investments. Quite often, these are the students studying accounting, finance or actuarial sciences. However, talk about finance and investments is not just relegated to students; it’s something that’s become quite widespread in recent years, due in part to the effect of the information superhighway, which has created a lower barrier to entry on financial information. Students, millennials, they all seem to have a firmer focus on their finances. Of course, if one is going to talk about students, then “finance and investments” isn’t so much about Wall Street as it is about staying off a financial “Mean Street.” Student life is what you make of it; some choose to party, while others choose to focus. Either way, there are major hurdles to overcome, but also steps that can be taken to mitigate the various financial challenges that one might face as a student.
Set a Budget
Setting up a budget is not imperative, but you’ll thank yourself in the morning. A budget is, in essence, a plan to work more effectively with your finances. By electing to work within a budget, you can track your spending, and if you can do that, then you can see exactly where your money is going, and what holes you need to plug. Students want to have fun; it’s part of student life. Budgeting won’t stop the fun, but it will make sure that there’s a balance between the fun and paying the bills. Always remember the following: The successful among us delay gratification and bargain with the future. Take some time to think about all your expenditures – student loans, room and board, manuals and textbooks, car payments, general upkeep and naturally, food. Once you’ve been able to work out what each category gets assigned, you’ll not just feel better about yourself, you’ll also sleep better at night.
Open a Savings Account
Saving is the cousin of budgeting, and if you are going to budget effectively, chances are there’ll be something to save too. If this one proves tough, don’t beat yourself up about it; many people struggle with savings. It’s a habit that can truly take a long time to cultivate, but one that done sooner, the better. The idea here is to pay for all the essentials and then to save what is left over. The famous money manager Warren Buffet said it best: “Do not save what is left over after spending, but spend what is left over after saving.”
Build Your Credit Score
This might even seem trivial but out there in the real world, it’s vitally important. Your credit score will pretty much get factored into most of your big financial decisions — buying a car, renting an apartment, getting a mortgage for your house one day, even buying a smartphone. The best way to keep a good credit score is to not default on any of your payments. The easiest way to muck it up or at least temporarily derail it is to rack up credit card debt — an act that’s not hard to achieve, especially when you consider the fact that credit cards can serve as easy money.
Are Students Taking an Interest in Investing?
Indeed they are. The basics of trading in Euros and Dollars are literally a click, a tap and a swipe away. The world of online trading and day trading has become so much more accessible. Throw in the fact that knowledge in this sector of finance has also become more accessible by way of online resources, forums, groups and social media and you have a perfect storm. Most students are in the age brackets of 18 to 21 and up, and most brokers accept those in this age range. The world of speculation and currency trading appeals to students because, outside of presenting opportunities to profit, it also constantly educates. Those who take it seriously need to be well-read on the topic, worldly in their news and politics, and fond of numbers.
