4 Things Every College Student Should Know About Money

When students go off to college, they might not know a lot about certain valuable life skills. Although the traditional college subjects are also valuable, there really needs to be a course in life skills, including learning about money.

1. Savings

The best way for teenagers to learn about money is either at home or in high school. Unfortunately, that rarely happens. Students might be told to open a savings account and put away money for college if they have a part-time job. Other than that, money is not talked about nearly enough considering that students’ whole future lifestyle depends on how they handle it.

Since saving accounts currently offer such poor interest rates, it’s best to learn about other places to put money where it will grow. The truth is that everyone needs to learn about finances especially considering that there are approximately 24.3 million forgotten 401(k)s. That means that many people just aren’t paying that much attention to their money.

2. Investments

Although some will say they don’t make enough to spare anything, regularly contributing even small amounts to an investment account will add up over the years. Very few colleges offer courses in investments and finances unless the student is majoring in business.  

Most investments aren’t for quick monetary gains but are meant to grow over years, even decades. The late teens and early twenties are the perfect times to learn about investing and to start contributing. If they don’t learn how to invest at home or in college, they can take an online course. There are even some finance games that make learning fun.

3. Credit Cards

Credit card companies prey on the young by pushing cards on freshmen the first week they arrive at school. This will be the first credit card for many and hopefully, someone has explained how the best thing is to pay off the balance each month and leave the extra available credit for an emergency instead of maxing the card out right away.

It’s a big temptation to spend all of the available credit but the grim reality on the day payment is due will be that if they only pay the minimum due, most of it goes to interest and they still can’t use the card for future purchases.

4. Retirement

College students should learn about retirement plans and 401(k)s before they even land their first full-time job. The importance of saving for the future usually escapes people in their teens and twenties since retirement feels very far away.

Social Security has an uncertain future and usually doesn’t pay enough for a retiree to live on. Pensions have pretty much gone by the wayside except for government work. Contributing to a 401(k) starting with their first job is the way to go. Most employers also contribute each month as long as the employee does as well.

Learning about money as soon as possible is the best way to plan for the future and to live a worry-free life.