So you’re graduating soon? Or maybe you just started your scholarly journey as a scholar. Congrats! It’s a crazy mix of excitement and, well, lot of expectations as you venture into the real world. Life hits you hard and fast and is especially focused on money. Yet, having your finances in order now, isn’t just smart, it sets you up for a much easier and happier later. Seriously, these aren’t just tips; they’re more like your secret scholarly weapons.
These are ten things you can do, starting today, to get your finance into balance, even as you embark on your scholarly journey, whether you’re abroad or studying in your home county:
1. Get a Grip on Your Spending (a.k.a. Make a Budget)
Budget is not a dirty word. It’s more like a roadmap for your money. Where is it going in? Where is it going out? Are you blowing way too much money on delivery food (guilty!)? A budget keeps things on track.
Write down all how much money you’re making each month – that’s all your sources of income, from your regular job, side hustle, that cash grandma sends you on your birthdays! Then gather all your expenses in a note until you know how you are spending your money.
There are plenty of budgeting programs around, like Mint and YNAB (You Need a Budget) that can make it all easy. As a scholar, you can even do spreadsheets. The concept is seeing where your money’s going and that you’re not losing money where you don’t want to. It’s making smart choices with your money.
2. Set Up That Oops, I Need Cash! Fund.
Stuff happens. Life gets curve-balled. Car repairs, surprise medical expenses, your family cat unexpectedly requires emergency surgery. That’s when an emergency fund comes into play. You want to save three to six months’ worth of living costs somewhere. I know, that’s a lot! Start small and add to it every month. A high-yield savings account is a good place to stick it – easily accessible, but still earns some money. Consider an online savings account, interest rates are higher than your ordinary-issue neighborhood bank. This fund keeps you from going into debt when an unforeseen expense arises.
3. Credit Score: Know It, Love It, Protect It.
Your credit score is your financial reputation. Landlords, lenders, and even employers see it. Get familiar with it. You can check your credit reports for free at AnnualCreditReport, and companies like Credit Karma give you your score. Pay bills on time, every time. Keep low balances on credit cards. Good credit score gets you lower interest rates on loans, which means saving money in the long run.
4. Debt: Be Smart About It
Student loans? Okay, they’re generally uncomfortable and most times they becomes burdens. But racking up credit card debt is a disaster waiting to happen. Borrow only what you absolutely have to, and be willing to pay it back. The snowball system (paying off the smallest debt first to get a psychological win) or the avalanche system (paying off the highest interest debt first in order to save money) can both work. Avoid those store credit cards tempting you with sales – they generally have ridiculous high interest rates.
5. Never Stop Learning About Money
Personal finance can be scary, but you don’t need to be a financial expert to make smart choices. As a scholar , you need to acquire as much knowledge as you can when it comes to finance. Read and read and read. There are books, podcasts, websites you have access to. Websites such as Coursera and Khan Academy has numerous resources to learn more. The more you know, the better you can achieve your money objectives.
6. Automate Your Savings
Set it and forget it. Seriously, put a portion of your paycheck directly into a savings or investment fund before you even lay hands on it. It’s much simpler to save when you don’t have to lift a finger. You won’t even miss the money, and you’ll be amazed at how quickly it adds up.
7. Get in the Investing Game, ASAP
The earlier you invest, the better. Bit by bit may add up over time because of compounding. Consider low-cost index funds or ETFs (Exchange Traded Funds) – a simple means of diversification. If you meet the eligibility criteria, a Roth IRA is a great vehicle for retirement savings (the money will grow tax-free!). Consider your risk tolerance – how comfortable are you with the possibility of losing money? – and invest accordingly.
8. Learn to Say No (to Impulse Purchases)
We are living in a society that expects us to shop ’til we drop! Learning to delay gratification is a power skill. Do you need that new device, or do you simply want it? Taking a day, a week, or even a month before making an unnecessary purchase can help determine whether or not it’s worth the cost. Tuck that money away instead! As such, purchase what you need first.
9. Keep Tabs on Your Overall Financial Picture
Your net worth is just what you own (assets) minus how much you owe (liabilities). Keep track of it every two months. Are you headed in the right direction? Where can you improve? It’s a good motivational aid and perspective-reality checker. It is your financial health thermometer, which might make you say, “Oh, I better take a break and check to see if I’m sick!”
10. Start Thinking About Retirement (Yes, Really!)
I know, retirement is a million years away. But the sooner you start saving, the less you’ll have to save later. If your employer offers a 401(k), sign up and put in enough to get the full company contribution (free money!). If not, look into an IRA. Small amounts do make a difference, and you’ll be glad you did.
Last thoughts
These things won’t happen overnight, but it is absolutely worth keeping. When you are older, you will definitely be able to tell the difference and you’ll be so thankful that you did take these steps when you graduated as a scholar.
