Facing Finances
By Merritt Sullivan
Finances can be overwhelming, especially in college because this is when things start to feel real. With these few tips, the stress around money and financial wellness can be resolved. You will be more independent and better prepared for post-grad responsibilities when money becomes a necessary focus.
One way to improve taking charge of your own financing and building credit is to open your own credit card. You might have access to a credit card, and it is beneficial to have an account in your own name, not associated with a parent. I did not completely understand the importance of building credit until I started asking my parents about it. Starting in college will allow you more flexibility and opportunity in the future. By setting a strong baseline now, might raise your chances of being able to rent an apartment, loan a car, or pay for a new phone. The key is that when you use your credit card, pay it back in full each month. Be disciplined about this as you’ll be judged by the banks on how responsible you are, and you’ll get the best interest rate. Your credit card app allows you to set up automatic payments (highly recommend!) and can take care of this task for you.
Become more financially literate by being curious; ask lots of questions. Since I am not in the business school, I am not exposed to any business-related classes or conversations in my day-to-day life. I have found that asking my parents questions has been super helpful for me to learn more about money and how to manage it. Money is an interesting subject because we rely on it every day yet so many people don’t talk about it. We often have this idea that someday, we will magically learn all these important things that a college student is ‘supposed’ to know. Financial literacy classes in high school have just begun to emerge. They weren’t available for me and likely, not you. While there are many resources out there to learn, I find that talking to other people is the best way to understand all the basic things about money.
Begin to set goals with the way you spend money. The first step is to understand the difference between your needs and wants. This can be an interesting and enlightening process because what we ‘want’ tends to drain our bank accounts much faster. A great way to begin is to divide money into accounts: one checking with a debit card and one savings account that you try not to use unless it’s towards a fun goal or investing in your favorite company. It’s a great strategy to have a savings account out-of-sight, out-of-mind. To save, you need to first know how you spend. Awareness is the key. Start with small things - order one less coffee or eat at the dining hall vs. grabbing that yummy playa bowl you are craving. Just because you have it, doesn’t mean you have to spend it! And if you are the rare non-spender, maybe your challenge could be to treat yourself more often.
Starting to build a foundation now can have many benefits to your future. Reaching out to others for advice or even looking up ways to be more financially experienced and responsible.
You got this!
