College Students Want Personal Finance Advice
Although college students are criticized for not managing their personal finance efficiently this is not considered by many to be due to a lack of desire or ability but to inadequate knowledge. Writing about 401K plans and funds do not seem the most inspirational of subjects but surprise has been expressed at how much college students learn at summer camps.
College students have also reported gaining valuable knowledge regarding personal finance either by working in a part time job or during the summer camps. They are given new incentives to manage various aspects of their personal finance and receive education relating to investment benefits for the future. This in turn stimulates the wish for further learning and casts a new light on a subject that could have been for most, taboo!
With this new approach, college students are discovering various aspects related to personal finance, for example; target-date funds, which are highly suitable for those who either don not have the time to manage their personal finance or the inclination. They are learning to appreciate the benefits that will be forthcoming in their not too distant futures. The stock market is proving something of an enigma for students, supported by various reports showing that the younger generation were especially compromised by the recent “bear” market. However, a positive development relates to savings being given priority, influenced by life after graduation.
Various college students have created their own form of personal finance management motivation by using spreadsheets. This enables them to maintain control of their budget and provides calculations from amortization schedules. This is an incentive gained by showing in real terms how extra payments towards outstanding loans now, will save money in the future.
Primary considerations for college students relate to keeping any loan facilities to the minimum:
Assess repayments on the minimum sum expected from a starting salary.
Maintain control of personal finance
Utilize online facilities as management tools
A disturbing factor related to college students and credit cards is the inherent debt created and the difficulty with repayments. It is revealed that ninety percent of student cardholders carried over month to month balances. This concern is added to by fewer than ten percent being aware of the interest rate charged for exceeding the limits or for late payments. It is generally accepted the college students should forego credit cards until they graduate and have experience managing their personal finance.
Sound advice given to college students is related to summer jobs or other part time work. These earnings could be used as contributions to a Roth IRA 2012, which has a limit of $5000, or the total of their earnings, whichever is the lesser sum. The earlier they begin to save, and manage their personal finance; more secure will be their future.