It’s a good idea to graduate from college prepared to handle your finances. On the other hand, if you’re feeling buried under a mountain of financial obligations, fear not! Finances are a thorny topic. However, there are critical financial lessons you may begin to learn in college, even if you have little financial resources.
To enter the “real world” prepared to achieve financial independence, let’s examine four key lessons you can master before graduating, best stock market books.
Having a medical insurance plan
No one should be surprised that health insurance is no longer just a recommendation—it’s a necessity. The good news is that you’re not alone. The No Surprises Act helps patients avoid unexpected medical expenses from out-of-network doctors, which can occur if you’re away at school and not covered by your parents’ health insurance until you’re 26 under the Affordable Care Act. A student health insurance plan is also an option. Regardless of your choice, locating, acquiring, and maintaining health insurance is worthwhile. As a “real adult,” you’ll have to budget for your health (and the costs of health insurance) for the rest of your life.
The significance of resolving your debts
Even though most of us are still in college, we are nevertheless given an aggressively hands-on lesson in the issue that debt presents. Paying merely the minimum each month ensures that you will still owe money when you retire because debt grows exponentially due to interest. As part of our essay on “4 Questions To Ask Yourself When Paying Down Debt,” we wrote on the importance of determining how much money is available for debt repayment. Make the most significant monthly payment that you can, whether it’s on a credit card, school loan, or even the mortgage on your first home –– and you’ll be on your way to getting out of debt faster. You must know how old do you have to be to buy stocks.
How to keep a budget in check
Balance your budget if you want to pay off your debt yet have money left over for your bills, grocery shopping, entertainment, and rent. First, AskMoney suggests focusing on the most fundamental aspects of your finances: your monthly income and your monthly expenditures (and on what). Once you’ve determined your absolute necessities, start paying off your obligations in order of importance. Don’t forget to save, either! To help you figure out how much money you may have leftover, this procedure will provide you with all the information you need to make an informed decision.
Make a rainy-day fund.
When something goes awry, it can cost a lot of money to fix. Although it’s not always possible to save a large sum of money each month, it’s essential to have an emergency reserve. Setting away three to six months’ worth of expenses in an emergency fund is a standard recommendation. This is a near-impossible task in college and, let’s face it, in real life, but it’s a worthwhile one to set for yourself. For now, a LA Times article on the topic suggests starting small and putting down $400. If possible, you can then build from there.
You can set yourself up for future success by making wise financial decisions while still in college. It doesn’t matter how much money you have saved or how much money is spent on paying off your debt.