Unique Ways College Students Can Better Their Financial Situation
Written by: Scott Blevins | Senior Vice President, Partnerships & Growth
Programs like EAW’s tuition and financial aid program help increase the value of college students while also providing funding assistance at no cost to their new employee.
“I had to take out quite a substantial amount of student loans, so much so that I maxed them out and I wasn’t sure if I was going to graduate.” – Andrew Bland, EAW student and Arizona State University graduate of computer sciences.
The student debt crisis is worse than it’s ever been before. According to the 2021 student loans report, student debt has increased by 144% since 2007, causing the vast majority of graduates to enter the working world with several years’ worth of debt.
Adulthood is already tough enough, and entering this phase of life with massive bills doesn’t make it any easier. Student loans are a serious issue, but it’s something that’ll take a long time to amend.
Meanwhile, college students can’t afford to wait around for policy changes, which is why they must take the necessary steps to prepare themselves financially now.
Increase Individual Value
Everyone sees money as the end goal, especially when it comes to improving finances. However, as a college student, the goal shouldn’t just be to make money – it should be to increase individual value.
Getting good grades is great, but getting experience is worth its weight in gold. Building a portfolio and resume through job experience, internships, certifications, freelancing or volunteering will help students make leaps and bounds into their career.
Increasing individual value isn’t purely monetary, but it is possible to demonstrate skills while making money, helping in both the short and long term. Programs like EAW’s tuition and financial aid program help increase the value of college students while also providing funding assistance at no cost to their new employee.
“Landing my dream career is something I never thought possible, and it’s something I couldn’t have done without the help of Education at Work.” – Brittany Collier, EAW student and University of Cincinnati graduate of marketing.
Showcasing skills and going beyond the classroom curriculum will better the chances of securing job opportunities.
Learn Financial Literacy
Unfortunately, the majority of high schools don’t teach financial literacy, even though it’s an essential life skill. Taking the time to learn about finances helps with budgeting, and understanding what makes up a credit score, the impact of inflation and tax increases, and how interest rates work will help students understand the real cost of living before they’re caught in the deep end.
Learning and sticking to a budget will allow anyone to improve their money management, which will decrease financial stress and help to avoid any further financial hardships.
Build Credit Now
Credit scores have a huge impact on a person’s ability to finance milestone purchases. Big investments, such as buying a home, have certain credit score requirements which can be hard to meet when a person doesn’t have enough credit.
Even purchases like rent, insurance, cell phones and buying a car are impacted by credit score. More often than not, the better the credit score, the lower the interest rate, and the lower the interest rate, the more money to spend and to save.
Ideally, people want to build credit as soon as they can, and if someone hasn’t started yet, the best thing to do is to start now. There are many ways to build credit from scratch, and the best way to establish healthy credit is by monitoring your credit score and paying off debts on time.
Save Some Money
Although it may seem obvious, saving money is essential to improving finances as a student. Start by creating a budget. Figure out fixed expenses and any interest rates, fees or taxes associated with them. Then, list out all variable expenses.
Underestimating or overestimating expenses won’t help to create a proper action plan, so try to be as accurate and detailed as possible when budgeting expenses.
After creating a budget, look for ways to save money without sacrificing quality of life. It’s surprising how many expenses can be cut down on in college.
“It’s really important to save at least a little bit in case of an emergency – like the pandemic – and having at least a savings account will be able to back you up.” – Nicholas Acciardo III, EAW student and Arizona State University graduate of Earth and environmental studies.
Saving bits of money here and there will pile up and save huge amounts in the long run.
Invest, Invest, Invest
Earning and saving money is important to financial success, but to really see finances grow, investing is key. One easy way to begin investing is to put money in a bank and earn interest, although it’s also good to set aside any extra money for additional investments, because while banking means easy access to funds, it’s also a very slow growth.
Retirement plans, such as 401(k)’s, use compound interest rates, putting only a couple of dollars into a retirement plan early on will help to grow a retirement fund immensely. Another option for those who would rather liquidate funds more easily is the stock market.
The average return on a stock investment is 10% per year, which is well beyond the interest rate of most savings accounts. However, this money isn’t guaranteed, so it’s important to research before making the leap. Ultimately, setting aside money for investments will allow growth in finances passively, creating opportunities for students to plan their retirement earlier than others.
Although the student debt crisis is an ongoing issue in need of attention, it’s important to always work on improving financial health. Life after college can be a challenging experience, but by practicing healthy money habits, any college student can get one step closer to financial freedom.
Founded in 2012, Education at Work (EAW) is a national work-based learning nonprofit that helps students graduate with less debt and more skills, connections, and confidence by connecting them with flexible, paid employment opportunities. We help high-achieving college students gain the career-ready skills and financial stability needed to succeed after graduation. Our campus-based “learn and earn” model generates career outcomes for students, provides employers with a skilled workforce to address early talent needs, and helps colleges boost affordability while improving student success. If you are a student looking to make college affordable while gaining resume-worthy job experience and career-ready skills for post-graduation success, apply now for an EAW position! For more information, please contact us.