What College Kids Can do Now to help Prepare for a Successful Financial Future

I recently had the opportunity to do a quick write and offer some tips for colleges students regarding preparing them for a successful financial future. So I'll go ahead and post it here. I hope you find this helpful.

Hello,

My name is Junior Jamreonvit. I've been a financial rep for 5 years now. I'm currently an independent broker/dealer at Capital Choice Financial Solutions. I've taken my Personal Finance classes at UCLA and currently hold my securities and insurance licenses. Finally, I am a Dave Ramsey Endorsed Local Provider for investing.


Addressing your topic, "What College Kids Can do Now to help Prepare for a Successful Financial Future":

- Have a Written Budget

You need to track your spending. You can either "tell your money where to go or wonder where it went." If you don't even know if you have a positive cash flow or not how are you ever going to get ahead with money? You need a budget. There are several apps you could download on your phone that could help you with this (e.g., YNAB - You Need A Budget). Be proactive at the beginning of each month have your categories down (e.g., expenses, food, etc) and know exactly where your money is going.

- Emergency Fund

This will be difficult for college students because you probably don't have a lot of money to spare to begin with but you need an emergency fund. Try and save anywhere between $300-$500 and put it in a savings account or money market. It's an account that is liquid so you can access it quickly. This money is for "emergencies" (e.g., car repair) because life happens. If you had a sudden car repair that required $250 but didn't have the money you would probably charge it on your credit card, which is probably charging you anywhere between 15-18%. If you had the cash you could save on the interest.

- Get Out of Debt Plan

If you're a college student you will probably have some form of debt (e.g., student loans, car payment, credit card, etc). Try and avoid debt when possible (look at the above example). Put all your debt on paper (this should be a part of your written budget) and line them up from smallest balance to the largest. If you could get extra work and make some extra or save some extra money somehow throw the extra into the smallest debt amount you have until it's gone then rollover that payment into the next debt. For example, if you had a $50 monthly payment on a credit card with a balance of $300 but you decided to pay $100 per month to pay it off quicker, once you pay off that credit card you rollover that $100 you just freed up into the next debt (e.g., car payment) in order to pay that off quicker. Dave Ramsey calls this the "Debt Snowball."

If you stick to these basic principles they don't change once you leave college. The numbers will change because you'll get a better paying job (hopefully) but if you stick to this plan you will have built into your habits financial success.