9 Financial Goals for Students That Actually Make a Difference
College can be a major adjustment for most, with newfound responsibilities and unprecedented freedom all at once. To help ensure that you not only make the most out of your experience but also financially secure your future, it’s essential to set some real financial goals before you even step foot on campus.
There is no one-size-fits-all approach when it comes to money management during college in particular – and we’re here to guide you through! These 9 financial goals for students we’ve gathered should be at the top of every student’s agenda, helping them build sustainable personal finance habits now and far into their postgraduate lives.
Create a budget and track spending
Financial success can seem like a daunting task, but it doesn’t have to be when you have the right tools. One of the most important financial goals, once you’re on your own in college, is creating and sticking to a budget.
Budgets don’t have to be as terrible as people make them out to be. You want your budget to act like a guideline rather than a strict rule – think of it more as an idea of how to carefully manage your money.
This way, if something happens and you find yourself low on cash, you’ll be able to quickly adjust by reviewing your budget – and then adjusting where needed. It’s a process that might take some time but if you start now while your expenses are still relatively simple, chances are that by the time graduation rolls around, you’ll already have the basic skills to ensure your financial future.
Here are two budgets that you can try:
30-30-30-10 Budget
This beginner-friendly budget could be the perfect starting point for people in school. The breakdown of the budget includes:
- 30% Housing/Rent
- 30% Needs (Utilities/Groceries)
- 30% Savings/Debt Repayment
- 10% Wants
I like this budget because it provides adequate spending for necessities like housing, food, and other bills, while also prioritizing saving as well. If y.ou are a young college student and start saving for retirement in your early 20s, you undoubtedly will find success
To read more on the 30-30-30-10 Budget check out my post on that very subject. I break down each category so you know exactly what goes where!
60-30-10 Budget
The 60-30-10 budget is unlike many of the other budgets people are pushing. This budget prioritizes saving money over all other categories and it can be pretty difficult for first-time budgeters. Let’s look at the breakdown:
- 60% Savings
- 30% Needs
- 10% Wants
What makes this budget so difficult is that it only provides you with 30% of your income for needs. But unlike the 30-30-30-10, needs include not only your groceries and other bills but your mortgage/rent as well. To fit all needs including the mortgage into 30% of your income will prove to be tough!
What makes this budget great for college students is this may be the only time in your life that you won’t be required to pay for housing every month. If you use this time wisely to save money, you could set yourself up pretty nicely.
Check out my post on the 60-30-10 budget to see the breakdowns of each category, and tips on how to stay on track.
Build an emergency fund
Ah, college life—dorm rooms, exams, and instant noodles. In the whirlwind of this adventurous phase, how about adding a touch of financial wisdom to the mix?
While you’re out there building your knowledge for a bright future, building financial literacy and an emergency fund as a college student is an amazing idea! With lower expenses and fewer responsibilities, it’s a prime time for saving a few extra bucks for unforeseen circumstances.
While other college students are wasting their time on TikTok, you will be achieving smart financial goals!
What is an emergency fund?
An emergency fund is an account where you stash away money for unforeseen events. This could be as simple as a broken water heater, to something much more trying like the loss of a job. An emergency fund is not an investment account or an account that you pull from when you want to buy some new clothes.
Your emergency fund should contain between 3 and 6 months of bills. This means if you spend $2,000 on housing and needs, then you should put aside $6,000 to $12,000 into a savings account for safekeeping. Having this money as a safety net can reduce the financial stress you have in your life. If you aren’t worried about the what if’s, you can stay focused on achievable financial goals instead!
Develop good credit habits
One of the top financial goals for students should be to create good habits when it comes to paying their bills on time. Developing this habit is essential for every college student to maintain a healthy credit history.
A good credit score can significantly impact various aspects of your life beyond college, such as securing loans, renting an apartment, and even obtaining employment.
By setting timely reminders, prioritizing expenses, and setting up automatic bill pay, students can enhance their credit early on in their lives. With some financial planning, you can create a strong foundation that will open the doors to countless possibilities in your future.
Avoid Credit Cards
As a student, navigating the world of personal finance can be both exciting and challenging. While it may be tempting to sign up for credit cards to cover unexpected expenses or enjoy rewards and cashback offers, it’s essential to understand the potential dangers associated with credit card debt.
High interest rates and hidden fees can quickly snowball, causing your debt to become an uncontrollable burden. Most college students don’t have the money management experience to handle using a credit card. This is why credit card companies prey on young college students. Companies will make you feel like you are making a strong, responsible financial decision, knowing quite well, that they could be setting you up for life-long debt, and potential financial ruin.
Instead, consider exploring other financial options such as budgeting, saving, and seeking part-time employment to cover unexpected costs. Remember, embracing responsible financial habits early on in your life is crucial to achieving financial goals and establishing a strong foundation for your future financial well-being.
Buy a car with cash
Purchasing a car with cash or a large down payment as a college student is not only an impressive accomplishment but also a fantastic financial goal to strive for.
In a world where many college students often rely on loans and credit cards for even the smallest expenses, saving up enough money for such a sizable investment demonstrates exceptional dedication and financial discipline.
Besides allowing students to avoid the burdens of debt and interest payments that accompany auto loans, owning a car outright also instills a sense of pride and self-sufficiency. It also can serve as a reminder that hard work, perseverance, and goal-setting can make a difference in one’s personal and financial growth.
Pay down your debt as quickly as possible
It’s no secret that student debt can be a heavy burden to carry, but there’s hope. Taking the initiative to either pay down debt as quickly as possible or avoid it all together can make a world of difference in one’s financial future.
By learning effective strategies such as budgeting, seeking alternative means of funding, and staying committed to repaying loans quickly, students can significantly alleviate the stress of debt and set themselves up for success in life.
If you already find yourself under a large sum of debt, then getting yourself out as quickly as possible should be your main financial goal. By using something like the debt snowball, you can rapidly pay down debt and quickly improve your financial situation.
Invest in stocks or anything else
One of my favorite financial goals for students is to learn to invest as early as possible. Investing in stocks is my number one choice, but if you prefer something else like real estate, crypto, or precious metals, then more power to you.
The key to good investing is to do adequate research, be consistent in your investing, and don’t fall for every phony sales pitch you hear. It’s important that what your investing in has a good track record, and also has the potential for future growth.
There is no way to cover investing in just a few paragraphs but if you have a knack for investing, then do your research and start investing as soon as possible. You really can’t go wrong investing in mutual funds that have a solid history of growth.
If you are a little shy when it comes to investing, then there is no shame in visiting a financial planner and letting them set up your investments based on your age and goals.
Start saving for retirement as early as possible
Believe it or not, kickstarting your retirement savings while you’re still in college may be one of the smartest financial moves you could make. Sure, it might seem a bit wild at first, but let’s consider the big picture here!
By starting to save now rather than later, you’re giving yourself a huge advantage over the course of your working life. That’s because the earlier you start socking away funds, the less you’ll have to stash later on, thanks to the sheer magic of compound interest.
With each passing year, the interest you’ve earned on your savings is snowballing, helping you to save even more without breaking a sweat! You can eventually get to a point where you will be able to reach your financial goals without any further investment of your own. This is all made possible by starting early!
Build a side business
Have you ever considered starting a side hustle or even a small business while still in college? Trust me, it’s a great idea! Imagine utilizing your free time more productively, learning new skills, and making a little extra dough to help cover tuition fees or weekend trips.
Many individuals have found their path to financial independence, all thanks to their side hustle. The benefit of starting your side hustle while still in college is that you won’t have a full-time job, a spouse, or children competing for your time. This makes it the perfect time to start building up your skills and develop something special!
Conclusion
As college students, having a financial goal set and in place is an encouraging start to your financial security. You don’t have to follow the trends and do what everyone else is doing; focus on making sensible and sound financial decisions, and try to stay on track.
If you put the effort and dedication into it now, you’ll be proud of your accomplishments and reap the reward later. We’ve discussed some steps to take when creating financial goals for college students – staying on a budget, living within your means, and investing in the right activities – but what other ideas can you come up with?
FAQ
What are some financial goals examples for college students?
Some fantastic financial goals for college students should include, budgeting, avoiding debt, investing, and saving for retirement. If you have a strong understanding of all of these principles you will have set yourself up for a good financial life.
What is a good financial goal for high school students?
As a high school student, your main financial goal should be to learn how to avoid wasteful spending and save money. If you can build strong spending and saving habits at a young age, those habits should carry over into your entire life and hopefully ensure financial freedom.
How much money should I save each month?
As a rule of thumb saving between 5-15% of your monthly income is a great place to start. You can fluctuate your saving percentage based on your goals (like retiring early).
What are some good short-term financial goals for college students?
Some great short-term financial goals for college students over the next few months would be saving up an emergency fund, paying down debt, and creating and sticking to a budget.
What are some good mid-term financial goals for college students?
Some great mid-term financial goals for college students over the next 6 months to a year would be saving up to pay cash for a car, saving up for a down payment on a first home, or paying off a larger debt.
What are some good long-term financial goals for college students?
Some great long-term financial goals for a college student over the next 5-15 years would be to start saving for retirement, paying off student loans, or saving up for a down payment on your dream home!
Should I get a part-time job while in college?
If you aren’t building up a business or side hustle as a college student then you should be working a part-time job. Make a budget and focus on making sound financial decisions that will set you up for success in the future.
How can I make sure I don't get into debt while in college?
To stay out of debt while in college you should avoid credit cards at all costs! The risk of opening a credit card account while still in college far outweighs any benefit that could be gained through a higher credit score. If you want to build your credit in college take out a small loan on an affordable car instead.
