Browsing Tag

planning for the future

Adulting Student Life

A College Student’s Guide to Retirement

November 22, 2021

As a college student, retirement is probably the furthest thing from your mind. You might not even know exactly what you want to do for a living yet. 

But, it’s never too early to start saving money and thinking about your future. The more focus you put on your retirement now, the easier it will be to set financial goals throughout your life and live comfortably in your golden years. You might even be able to retire early!

So, what are some of the basics to consider if you want to start planning and saving for retirement? 

Know How to Invest

One of the best ways to save money for retirement is to educate yourself on investing. Your mind might immediately go to stocks and bonds, but a good rule of thumb is to diversify your investments. It’s less risk, especially when you’re starting out, and could yield a greater return. You can diversify by investing in things like:  

  • Mutual funds
  • Savings accounts
  • Index funds
  • ETFs

It’s okay to think outside of the box when it comes to investments, too. If you’ve always been interested in real estate, consider purchasing a rental property. Does a friend of yours have a vineyard? Consider investing in their wine company. You can have some fun with your money while making smart choices with it. 

Understanding which investments are taxable can also help you decide which ones are right for you. Try to have a mix of taxable and non-taxable retirement accounts, like 401(k)s and company bonuses. There are steps you can take before and after you stop working to limit the taxes you’ll have to pay once you retire, so don’t be afraid to do your research on the best investments now and in the future. 

Set Achievable Goals

When you’re in college, it’s easy to dream big. You’ve got the world at your fingertips and everything seems possible.  

There’s absolutely nothing wrong with setting big goals. But, when it comes to your finances, the smarter option is to set smaller, achievable goals for the rest of your life that you can achieve before moving on to the next one. Some of your savings goals could include: 

  • Saving for a car
  • Saving for a house
  • Paying off your student loans
  • Getting rid of other debt

By mapping out your financial goals, you’ll get a clearer picture of your budget, so you can determine how much money can be put away each month for your retirement. As you start to reach some of your goals, you can start saving more money and adjust your budget. It’s a life-long process that can require consistent “tweaking”. But, it will make a big difference in your long-term financial success. 

It’s okay to have fun with your money right now but be smart with it. Thinking about your retirement and what you want to do with your life now will make it easier to achieve your financial goals in the future. Keep these tips in mind to start putting more focus on your finances and what you really want out of your eventual retirement. 

BIO: Sam Bowman has a passion for learning. As a seasoned professional writer, he specializes in topics about people, education, tech and how they merge. In his spare time he likes running, reading, and combining the two in a run to his local bookstore.

Adulting Transition

3 Tips to Help You Plan for Home Ownership in College

May 26, 2021

Many younger Americans say they are in no rush to become homeowners, and instead want to focus on enjoying life experiences. However, on the flip side, there is also a growing percentage of younger adults working towards homeownership before 35. In fact, many of them are planning to buy their first home while they’re still in college. If you’re thinking of homeownership, you will need to be careful to avoid making common money mistakes in college. Planning ahead gives you ample time to prepare – if you know where to start.

Weigh The Pros And Cons Of Early Homeownership 

College graduates spend three to six months after graduation job hunting. They are also very occupied with setting up their lives, either renting an apartment or focusing on paying off student loan debt. Adding a monthly mortgage to that list can be tough, and should only be undertaken with proper planning. Renting after college also comes with less financial commitment, which can be a good thing. If you haven’t decided where to live or your career path, it may be difficult to stick to a long-term decision like buying a home.

There are also great perks to getting on the property ladder instead of renting. Depending on the location you choose, a mortgage can sometimes be cheaper than renting. If you’re in a good credit position after college and have little debt, it increases your chances of getting a mortgage in the long run. Lastly, if you purchase a home while you’re in college, you could be better off financially by saving on dorm costs. Renting out your home can be a stable income stream. Consider all of these pros and cons before making your decision to become a homeowner.

Narrow Down The Location Early

The earlier you know where you want to own a home, the better prepared you can be to do so. If you choose to, you can buy a home close to your college and skip the boarding costs on campus. Alternatively, you could rent it out to fellow students to help with paying your mortgage. Another reason to choose your location early is that it helps you track home prices and how much you need to save before applying for a mortgage.

Work On Reducing Your Debt 

Many young people are delaying homeownership because of student loans. In a survey by Clever, half of undergraduate students said they would have to put off buying a home to repay their student loans. Around 43 percent of Americans who attended college have some sort of student loan debt to their names, along with credit card or personal loan debts outstanding. When it comes to credit cards and students, starting earlier is always better. 

To make money, consider getting a part-time job while you’re in college, or launching a side business. There are many earning opportunities for college students, including tutoring or on-campus jobs. Also, learn to stick to a budget. If you are not familiar with budgeting and money management, a great place to start is inquiring if your college offers personal finance classes.

Bottom Line

There are many reasons why buying a house in college makes sense. Equally, there are many reasons against it. While real estate can be a great investment in the long term, it’s not universally applicable. The area you choose, your personal finance habits, and the additional expenses that come with homeownership should factor into your decisions. For some, it may be a great dream. For others, it may be too much too soon.