There’s a lot of talk during this particular time of year regarding New Year’s Resolutions. Whether you’re planning to step up your fitness routine or put yourself on a more focused career path, it’s always a good idea to set some financial goals for yourself as well. Not sure where to start? Our partners at College Ave Student Loans pulled together some excellent suggestions. Start with one or tackle them all!
Build an “emergency fund.”
To put it simply….things happen. Pipes leak, people get sick, car accidents happen – you can’t always predict all of your expenses each month. Though you can’t always predict unexpected expenses, you can plan for them. Even if you’re a student with parental support, it’s a good idea to start building an emergency fund early on. Start by determining how much you spend each month and aim to save that amount for your fund. Once you reach that goal, aim for two months worth of expenses. Continue this strategy until your emergency fund reaches a level you’re comfortable with.
Learn your credit score (if you don’t already know it) and determine a strategy to improve it.
The famous “credit score” – the 3-digit number that can affect so many future endeavors, from owning a home to buying a car. It might not seem like a huge deal now, but having a solid credit score will make your life much easier down the road. The first step is to learn what your score actually is. Sites like annualcreditreport.com let you check your credit report once a year for free.
It’s common for college students to have a low – or even nonexistent – credit score because they don’t have an established credit history. In this case, the first step is to start building one. A good place to start is to have a parent or legal guardian add you as an authorized user on their credit card. To learn more, read up on “What is a Credit Score?”
Once you know what your score is, outline a strategy to improve it or maintain it. Paying your bills on time and reducing the total amount you owe is a good place to start. Our previous article, Understanding Your Credit Score, outlines what factors contribute to your score. You can also read up on tips to improve your credit score.
Set a budget…and stick to it.
Few things help keep spending (and saving) in check like setting a budget. However, creating a budget can be the easy part. Sticking to a budget is the hard part. It’s important to remind yourself why you are setting these guidelines for yourself and how they will help you in the long run.
Learn how to build a basic budget and savings plan in The College Student’s Guide to Budgeting.
Make in-school payments on your student loans.
Many student loan borrowers have loans on a deferred repayment plan, meaning that payments are not required until after graduation (or the borrower is no longer enrolled). However, even if you aren’t required to make payments, it’s a great idea to do so – even if it’s only $25 a month. Learn more about the benefits of in-school student loan payments and how it can save you money in the long run.
Avoid trying to “keep up with the Joneses.”
The general phrase might be cliché, but the message behind this goal is a good one. Be honest with yourself – do you ever spend more than you planned in an effort to keep up with those around you? Have you ever wasted money on something that was only meant to impress other people? Don’t let other people’s choices or preferences affect your financial health. Don’t overextend your finances just so you have what everyone else has.