Graduating from college is a momentous occasion. Your brain is (hopefully) stuffed with knowledge about your chosen major, plus a ton of life skills you learned while keeping yourself alive and not setting anything on fire while making macaroni and cheese… sober or not. That said, one thing many college students leave without is a solid understanding of personal finance.
After college, many people learn about money lessons the hard way, through life experiences. A few missed payments here and there, school or consumer debt, an ill-chosen career field all conspire to make post-college life tough. Here are five money lessons students won’t learn in college, plus how you can avoid the same personal finance mistakes others have made.
Establishing a Realistic Budget
Establishing a realistic budget is incredibly important, but unfortunately this money lesson is something many colleges don’t teach. Luckily, setting a budget is pretty easy, especially when you’re a college student.
There are a lot of ways to set up a budget, including the old fashioned pen and paper way, or using new technology. Personal Capital is a great way for college students to track their budgets, and it’s available anywhere their phones are. This means you can check your budget before splurging on a night out, or before you have to purchase textbooks.
By creating a budget in college and sticking to it, you’ll be on the right path to money management in the future. According to Gallup, only one in three Americans prepares a household budget, so college students who tackle this challenge will reap rewards for years to come.
You Can Live Like a College Student Longer Than You Think
After graduating from college, it’s easy to let lifestyle inflation creep up. After all, many college students have just lived with one (or more) gross roommates in a small apartment, mostly spending money on textbooks and tuition. Once you get a job out of college, it’s easy to splurge on the more expensive phone, nice gym membership, and more expensive apartment (without roommates). However, this is a bad personal finance move.
One money lesson college certainly doesn’t teach college students is: be grateful you’re young and don’t mind living in weird conditions! Being able to live with multiple people, go outside and exercise, and eat cheaper food is a blessing you won’t be able to do when you’re in your 30s.
If you can, continue living with roommates in a cheaper part of town. Continue making healthy yet frugal meals instead of going out regularly, and seriously reconsider that expensive phone plan. After college, you’re likely still in your 20s and can handle living like you’re in college, minus all the textbook expenses. When you’re 30 and have a spouse, a house, and potentially a kid, you definitely won’t be able to live like that any longer!
Your College Major Doesn’t Really Matter
Note: your college major might matter if you want to do business, law, or medicine, as having a foundation in economics, history/philosophy, and biology/chemistry is helpful for those respective fields. However, if you’re fairly open to the type of job you want after college, good news: the major you choose doesn’t really matter.
The good thing about most college majors is almost all of them will help you get a job. I know an art major who is currently working in admissions at a major university, while a French major friend I have works in the oil industry (not using her French at all). While accounting majors all pretty much work in accounting, your humanities degree will not doom you for finding work. You may have to get creative in what you apply for, but you’re a humanities major: you’re used to being creative.
College is the Time to Find Out What Matters to You
Yes, you’re paying a lot of money to attend college, and you need to focus on doing well in school and graduating on time. That said, take courses outside of your major. Accounting student? Take a Communications class and learn how to speak in public. Humanities major? Take an Economics class to figure out what everyone means when they’re talking about the Greece debt crisis.
Right now you may want to get a high paying job in any field so you can live a luxurious lifestyle. Five years from now, you could realize your job is soul-crushingly boring, but you don’t have any other skills or interests because you only focused on that field. That would be tragic, so don’t let it happen to you! Take courses and learn skills in other fields just because you can. Do it to learn something outside of your major and to enhance your resume. You never know when you’ll need to use it, and you’re paying for it anyway.
There Are Many Ways to Earn a Living
Whereas many Baby Boomers (and even some Gen X) graduated from school and got a traditional, location-based job, Millennials have so many more job options than their parents. It might not seem like it, but that’s only because most college advisors don’t even know about it themselves. Nowadays, you can make money through passive income, being a freelancer, and more.
The best part about the sharing economy and the Internet is how many possibilities are available to us now. Twenty years ago, many people couldn’t have predicted the rise of Uber, or TaskRabbit, or many of the other Internet-based jobs available nowadays. Take advantage of these side hustles to create your own income, whether you use freelancing as a full-time job or as a way to supplement your income.
Graduating from college is a tremendous experience, but it doesn’t mean the end of learning. Personal finance is a lifelong learning experience, and by setting the right foundation, your experience can be infinitely more positive.
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What money lessons did you learn out of college, and what money lessons would you say are important for college students to learn?