Maybe you’re one of those students who has always had the Midas touch when it comes to money – if so, then you’re likely pursuing a degree in finance. But if you’re like many students, traditional or non-traditional, you could probably use a little help with money management. Many of us spend a fair amount of time taking care of our health in different ways: physically, mentally, spiritually, and more. But perhaps we ought to consider another significant area of our wellness: finances. According to the Financial Health Institute as documented by Ally (2015), three-quarters of Americans report finances as a main cause of stress. Now is the time to dedicate thoughts, energy, and time into ensuring we have financial wellness. With day-to-day bills, college tuition, saving for retirement, and health care costs, knowing how to get started with money management and financial wellness can be difficult.
What is Financial Wellness?
According to Tom Rath and Jim Harter-- the leaders of workplace well-being research for Gallup, financial wellness is defined as effectively managing your economic life. Key elements include: understanding spending within your means, preparing for emergencies by having a set amount in savings (usually a minimum of six months of income), being educated on investing tools and opportunities, and devising a plan for your future.
Misconceptions About Financial Wellness
There are many common misconceptions when it comes to our personal finances. We may feel intimidated or wonder where to even begin on this task.
The first thing to understand is that everyone should partake in financial planning. It is not limited to a certain phase of life or economic class. Even if you have debt, it is possible to manage finances and still plan for the future.
Many people believe that the whole idea of building wealth and planning for retirement is too complicated for the average person. Dave Ramsey, author, radio host, and television personality notoriously says, “Personal finance is 80% behavior and only 20% head knowledge.”
6 Tips to Help You Save
Successful financial wealth building does not require a great body of knowledge, but rather some knowledge, and more practically, discipline. Here are six essential tips to help you save money.
1. Put Your Student Status to Work
Some of the nicest perks to being a student are all the discounts that are available. You might be able to find discounts on everyday purchases such as groceries and movie tickets. Student discounts can be even more impactful if you’re considering a larger purchase like a computer or a car. You may have to hunt around a bit to find information about discounts, but the savings could be worthwhile. Always ask about student discounts.
2. Follow the (Free) Money
Cut the cost of education by having someone else pay for it. There are loads of scholarships out there just waiting to be claimed by students who are willing to do a little research and fill out some applications. If you belong to any community or professional organizations, see if they offer scholarships to members. The College Board’s Scholarship Search, FinAid, and Fastweb are all resources for ferreting out scholarship opportunities.
Be aware, however, that you should never have to pay to apply for a scholarship. If a scholarship application requires a payment of any kind or the scholarship organization contacts you via an unsolicited email, it may be a scam. Do an Internet search of any suspicious scholarship opportunity and see what turns up.
3. There’s an App for That
The best way to manage your money is with a budget, but many people struggle to adhere to budgets over time. If you’re having trouble creating or sticking to a budget, try using an app. Mint, for example, is a free online personal budgeting app that can help you calculate your net worth, track spending, set savings goals, and more.
4. Avoid the Plastic
You can’t beat the convenience of credit cards and debit cards, but you might save money if you try to make a habit out of paying with cash for your smaller purchases. It’s a psychological trick, but people tend to be more careful about what they spend when they have to hand over actual dollars and cents to a cashier. Avoiding credit will also force you to break the debt cycle of spending money you don’t currently have. Plus, you’ll never have to pay credit card interest on a cash purchase, and that means more money in your pocket.
5. No More Automated Payments
Just as the convenience of credit cards can lead to bad money habits, the ease of automated payments can facilitate frivolous purchases. Many services offer an option of having fees and dues automatically charged to your credit card. In theory, this idea sounds great because you never have to worry about missed payments. But maybe you should be pondering those payments. When you have to pay a monthly or annual bill, you will stop and consider if the service is still necessary. Think about that new streaming music service that you were so eager to try out a couple of years ago: are you still using it enough to justify the monthly cost?
6. Seek Help
If you do find yourself sinking in the quicksand of money problems, don’t be afraid to ask for help. The National Foundation for Credit Counseling (NFCC) is a nonprofit organization that offers counseling services to consumers. For a fee, the NFCC provides counseling on credit, debt, bankruptcy, housing, reverse mortgages, and student debt.
College is a time for learning many new ideas and life skills, but one of the most valuable skills you can master is how to manage your finances. Develop good money habits now and they will pay off for many years to come.
Written by University Staff