Why You Should Establish Financial Goals in College

College, for many people, is a time when you try to balance the responsibilities of adulthood with the fun, adventurous environment of living on campus. You study hard and you party hard. You’re planning for your future while still trying to live in the moment. One of the responsible things that you should be doing in college is developing your financial goals. Why? Because this can shape the entire course of your education. Even if it doesn’t influence your major or career choice, it will affect your decisions while you’re in school and on into adulthood. Here is some advice on why you should establish financial goals in college and how to make smarter choices.
To Borrow or Not to Borrow
One of the first financial decisions that you’ll need to make as a college student is whether or not to use student loans. Most college students (and their parents) can’t afford to fully fund a child’s tuition. Student loans offer an affordable and practical means to get an education. Federal student loan amounts are capped by the federal government. For students that are eligible for the full amount of the loan, they may borrow all of it, even if it’s not needed. This is a mistake. To keep your loan payments down in the future and avoid as much debt as possible, borrow only the amount you need and no more.
Charge It!
Another problem that many college students run into is the use of credit cards. Credit card vendors are on campuses all over the nation during the first week or so of college enticing students to enter the world of adulthood by signing up for a piece of plastic. It’s all too easy to spend thoughtlessly when you have that card in hand. Having a credit card is okay, but it should be reserved for emergency use only. Newsflash: a late night pizza run with your roommate is not an emergency.
Learning to Budget
College is the first time that many of us encounter the need to budget. You only have so many dollars on your meal card, for example. Your parents may give you a certain dollar amount per month that you will need to use for groceries, clothes and even the occasional night out with friends. The point is, your resources are limited. Each time you get paid or receive an allowance from your parents, sit down and write out a budget for every dollar. This is a valuable skill that all adults need to learn.
As you can see, the choices you make in college can affect you for years to come. If you don’t learn to budget when your income is small, you’ll have problems learning to budget after you graduate and start making $50k per year. If you borrow as much as you can or accumulate a lot of credit card debt, you’ll be paying those off for years to come. Having smart financial goals in college will allow you greater financial freedom as you begin your professional career.
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