Being a student can be overwhelming at times. Between maintaining good grades, extracurrcicular activities and a social life- we sometimes lose track of our health and financial wellbeing. However, these two factors are paramount to living a fulfilling life and maximizing your potential in life.
In this particular article, I’ll be going over the personal finance aspect of your life that you may have been neglecting (the aspect that I’ve pretty much neglected up until little over a year ago to be honest). My goal in writing this article isn’t to necessarily educate you because I am not a finance major or financial professional; what I would like to do is introduce you to some general things about finance that I’ve personally overlooked and wished I had thought about sooner.
I’ll break this down into three parts over the course of the next two weeks: Savings & Financing Your Education, Debt Management/Investments, and Credit.
You ideally want to start by opening an high-interest savings account that is FDIC Insured. What do I mean by high interest? Yearly interest rates are usually below 1%, however, there are a few savings accounts where the interests are above 1.3-2.05% which would be considered high-interest.
After you find the right account for you, you want to create an emergency fund for yourself. This is usually defined as a safety net of 3-6 months worth of expenses that you can use in the case if you lose your job, get sick or etc. If you are a high school or college student and don’t really have defined monthly expenses, I would say start by trying to save $1,000.
From there, assess and create a general goal for yourself to save up to.
If you are working, it is usually recommended that you save roughly 20% of your check and put it towards this until you’ve hit your desired threshold
Financing Your Education: This is deserving of its own article so I won’t go into too much detail. However, the following holds true:
- Start by filling out FAFSA completely and ASAP and listing your potential colleges. This allows you to lock in the best possible federal aid options for financing your education if you need it.
- However, you should scoping out scholarships and grants from your institution (known as internal aid) and outside of your institution (external aid).
- After you’ve maxed out all scholarships then you can exhaust federal options that you secured from FAFSA as needed while making sure you aren’t taking more than what you need.
- If you are unable to afford the price tag that University ‘X’ is giving you, don’t be afraid to go to community college. There is a wide range of benefits of going to a two-year college first then transferring versus going straight to a four-year that a lot of people overlook due to the stigmas of going to a community college. I promise you that in the grand scheme of things, either option is acceptable.
- Last but not least, private loans. Unless you have amazing credit or can secure a cosigner with amazing credit; I would recommend avoiding this method as much as possible and if forced to use this method, borrow the minimum amount possible. You don’t want to be caught in a high-interest loan with a lot of money owed on it.
Here’s a video to watch on good savings accounts to look into but again, it’s always good to do your own individual research: (https://www.youtube.com/watch?v=ZvgDorJU21E)
Here’s FAFSA General Guidelines for Federal Aid: (https://studentaid.gov/sites/default/files/funding-your-education.pdf)
Here’s a slightly more in-depth version of how to finance your education: (https://www.investopedia.com/articles/pf/08/affordable-college-education.asp)
Be on the lookout because I will be making my next post on debt management/investing sometime next week! Other than that, stay safe on this 4th of July!
Are you a premed? Join Diverse Medicine now. It's free!