Take 5: Learn 5 Essential Personal Finance Tips in 5 Minutes

Posted on: in [ Personal Finances ]

 

High school graduation comes with a diploma, but these tips will help you be financially successful your whole life.

 

May is here and with it comes a major milestone in a person’s life: graduating from high school. College is the next step in many of our high school students’ lives. While this is often seen as one of the most fun times of a person’s life (for good reason), it can also be perilous when it comes to finances.

 

The average student loan debt for the college class of 2013 was $29,400, and with college costs on the rise, your child could be looking at much more than that four years from now. That’s why your friends at State Bank chose this month as a chance to impart a little wisdom. We’re starting today with five tips aimed at keeping your child financially responsible through college so they come out with less debt and better financial habits. Be sure to share these with the soon-to-be graduate in your life!

 

Become an ace at budgeting- using a budget allows you to have an overview of all the money coming in and going out. It can also help you create short and long-term savings goals and make better financial decisions.

 

Prioritize saving money- fact: life happens, and when it does, it’s good to have money you can fall back on just in case. Even if you have to start small, starting a good savings habit now will do you wonders throughout life.

 

Know your stuff when it comes to credit cards- credit cards are not “free money.” Every cent you spend must be paid back within a certain period of time or it starts to rack up interest as well. A good strategy is to co-sign a credit card with your parents and use it only for one specific cost, such as gas. Since you already pay for your gas anyway, you can use your credit card at the pump, then pay off the balance online. This will help you establish a good credit foundation. Just be sure to pay the entire balance off on time every time to avoid interest.

 

Money + interest + time = good things for you- the longer you can have money invested earning interest, the more money you will accumulate over time. This means that saving your money in an account with higher interest rates as early as possible is a great way to get ahead.

 

Being frugal is not a bad thing- yes, your friends and advertisements may tell you that having the latest and greatest everything is the only way to live. However, life and college are about more than the stuff you own. Learn to differentiate between a “want” and a “need” and you will save a lot of money during your time at college.

 

If you follow these five basic tips in your time at college, you’ll graduate with more than a diploma. You’ll have a better understanding of how your finances work and be much more prepared than your classmates who spent their four years piling on debt. If you or the graduate in your life need help getting started, come see your friends at State Bank today!

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