Five Financial Resolutions Every College Student Should Make
As 2012 rolls in and college students gear up to return to campus after winter break, now is the time for them to get organized and make this year the one to get their finances on track.
Experts advise students avoid making over-the-top goals that are hard to stick with and instead make smaller, even daily goals to achieve financial aspirations this year.
“Say you have a list of big goals--pick one of those and break it down into tiny steps,” says Kimberly Palmer, author of Generation Earn. “Big goals seem much less overwhelming after you divide them down into the tiny steps you have to take.”
Here are five financial resolutions that the experts say are important, yet attainable, for students to achieve in 2012.
Resolution No. 1: Learn from your progress over the past year
Palmer suggests students reflect on the resolutions they made last year and gauge how their goals have changed, and identify what areas they fell short on achieving.
“What have been your biggest money challenges? Disappointments? Mistakes? Thinking back on that can help you shape better goals for this coming year and also see how far you've come,” she says.
Resolution No. 2: Manage your student loans
Students can apply for financial aid any time after Jan. 1, but they should apply early as money is distributed on a first come, first serve basis to eligible applicants.
With that being said, students should carefully budget and identify how much money they need to borrow and should refrain from taking out more than necessary, says Nadine Maher, dean of enrollment management at Peirce College.
“Be sure to watch your debt in the New Year and be mindful of not borrowing what you do not need,” she says. “Defaulting on student loans can be a financial nightmare to students.”
Resolution No. 3: Make saving a priority, even in small amounts
Even students on a tight budget should put some money toward savings this year—no matter the amount.
Even $5 a week creates the beginnings of a financial cushion and gets you in the habit of putting money away.
“It doesn't necessarily mean spending less if you are already maxed out on frugality; it could also mean getting creative about earning more, too,” says Palmer.
Resolution No. 4: Invest in your future
Investing in their professional future now, can pay off later for students.
Students should take advantage and use educational and professional resources available at their schools (clubs, organizations, alumni groups), which can lead to potential job opportunities.
“Network on and off campus, with alumni, to prepare yourself to find the best job possible for you after graduation,” Palmer says.
Resolution No. 5: Aim to start planning for retirement when you get your first job
Seniors who are starting their final semester at school need to start planning for entering the workforce and the day they leave it.
Soon-to-be grads should start thinking about how planning for retirement is going to fit into their financial goals for the year, says Scott Holsopple, president of Smart401k. Doing some research or talking with a financial planner ahead of time can help you understand the ins and outs of putting money away for the long haul.
“I think a lot of people put off saving for retirement until they make more money or they get more settled,” he says. “This is a great opportunity to get started on the right foot and it can be really simple.”