Are you all set to enter your life’s new and most exciting phase, ‘the college’?
College is an exhilarating period in every student’s life. This may let many of us move away from home and take some important decisions for ourselves. Managing one’s own finances at this age may be challenging. The most important thing to remember about planning finances is ‘to start early’. Financial planning does not have to be detailed or complicated. There are just a few questions that one should think over.
1. How do you lay a strong foundation for long-term earnings and wealth?
Many students have negative net worth during college, which means they have a loan like an education loan running. Many a time, these debts exceed what is owned. Being in college, potential for future earnings is not counted in this phase.
Therefore, focus should be on diversification of personal skills. This can be done by choosing the right specialization, applying for practical courses and internships, or developing communication skills (like reading or writing).Every learning during college is an investment for the future.
2. What financial mistakes should one refrain from?
Sometimes education loans can lead to staggering debts. So refrain from thinking the debt can be managed after graduation and ensure an under-graduation loan is not more than the first year’s salary.
To build wealth for the future, reduce the present debt and try to increase potential for future earnings. Another mistake to avoid is playing with credit card. This can prove to be a risky game. Indulging into transferring balance to cards with lower rates, can hit credit score. It can also have other negative effects even to the extent of hindering your ability to grab a good job.
3. How to mange debt and boost your credit score?
It is necessary to keep the credit card score in good health for any student about to graduate. Take this task as meticulously as completing assignments. Avoid getting influenced by peers and stick to a budget. An affiliated credit union such as SBI Advantage Plus Card that offers credit cards to students at relatively lower interest rate.
4. Where to look for some wise words of guidance?
You can look for qualified professionals providing useful guidance to beginners. Its important to set limits. and list the things that can be done without. Apart from a long-term financial planning, there are some daily activities where financial choices are critical.
Author is the Chief Financial Planner at holisticinvestment.in, a Financial Planning and Wealth Management company