Education and Your Financial Future

College is rarely easy. You have to prove yourself to your mentors, usually adjust to living away from home for the first time (there's nothing wrong with a bit of independence) and manage your own finances. In some ways it is the beginning of really growing up but that in itself presents challenges. The social side of college is great but there are constraints; how difficult you find your course and whether your finances allow you to do all the things you want to do.

Often that doesn't change right through your life as there are differing demands on your money throughout your career. It can begin by repaying your student loan, continue with marriage, starting a family and buying real estate.

Better Prospects with student loans

There is no doubt that a college education gives you a better chance of a well-paid job. The price that most people have to pay is paying back the student loan that has helped you through your education. Although the terms of such loans are not onerous students often need more to fund their lifestyles, especially if they have never really understood the importance of financial management and have taken an easy route to more money, a credit card.

Prior to the recession credit card companies fell over themselves to offer credit. They are now more circumspect but there is still the opportunity to use a card to buy things that are perhaps not quite affordable and merely pay the minimum the company requires at the end of each month. It is the beginning of a slippery slope to problems because a high level of interest is applied on a monthly basis to all credit card balances. Paying the minimum will hardly reduce the balance at all.

Competing Demands

When a graduate finally begins a career then he or she needs to think about the existing calls on the pay check and the things that might begin to loom:

  • Repaying a student loan
  • Looking at any high interest debts such as credit cards and possibly looking to pay off any balance through a much cheaper personal loan then look for find less upfront fees money providers .
  • Regular monthly bills if work has taken them to a new city, typically everything from rent to utility bills and other expenditure that they did not face when they lived at home.

Beyond the short term there are other things that should not be ignored:

  • Saving money to face potential emergencies
  • Starting to think about retirement because no matter how remote it may seem, regular saving for retirement even of small amounts each month makes sense. A 401k is a popular tool because as well as there being tax advantages, employees will contribute to a certain level.
  • The possible change of circumstances; marriage, real estate and a family with all the additional expense that involves.

The idea that once you were earning your own money you would be able to buy all the things you have always wanted is misplaced unless you fall into the trap of accepting easy credit which is the road to problems. You will most likely still have to be patient. You should not begin to spend beyond your means even if your friends do so.

If you are starting to feel depressed as though your education has taken you nowhere you should sit down and set yourself goals and work out how to achieve them. Earlier on you will have seen about the common sense policy of paying off credit card debt with a cheaper personal loan but there are other things you need to do so that you have a surplus between your income and expenditure at the end of each month, and that surplus is invested in your future, an emergency fund and retirement, rather than being regarded as a surplus you can spend on anything you like.

Macro and Micro

You need to set yourself general targets, even as general as a secure financial future but then think about the detail in order to achieve that:

  • Getting rid of any expensive debt such as cards
  • Checking whether you are paying too much for your utilities, insurance or telephone
  • Making a determined effort to avoid impulse spending to the extent that you write down your shopping lists and buy nothing more
  • Taking lunch to work. The coffee shop and its sandwiches are expensive on a daily basis, and not very healthy at that

Once you start to make savings you should get the money transferred out of your checking account as soon as your pay check arrives. It can then be regarded as inaccessible and you will then work with what you have for the rest of the month.

It is important not to get caught up in things, believing that you need to have a new car regularly and that you cannot possibly live without the latest piece of technology. That is clearly nonsense but you must believe it, no matter what your friends say. Yes, you have worked hard but that does not mean you can spend at a level what you have yet to earn. If you are determined, hardworking and disciplined your time will come.

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