Who says you have to wait until after graduation to get paid? College is the perfect place to begin making and saving money. While you’re being taught how to work for someone else, start building your own financial freedom fund right on campus. Undergrad was referred to as the bubble amongst my SUNY Albany Great Danes; it’s that in-between phase of adolescence and adulthood. As a student, I read Suze Orman’s The Money Guide for the Young, Fabulous, and Broke but it took me a while to apply those principles because they focused on what happened after well…being broke. The missing key was advice for the current college student who wasn’t necessarily hard on cash but learning the ropes of personal finance overall.
Here are 4 money tips I’d tell my college student self:
- Go Out Less, Save More. Going out every Thursday, Friday, Saturday, and at least one Sunday a month doesn’t pay in the long run. You spend money to get drunk and in some cases, make random phone calls to people at obscene hours of the night. If you go out every weekend each semester for four years and spend at least $100 dollars each time, at the end of your undergraduate experience you would have spent $14,400 dollars. This doesn’t include Spring Breaks in South Beach. Start saving your money now. Cut back on going out and focus on building your wealth. You’ll thank your sophomore self later.
- Pursue Your Heart’s Desires Now. Don’t listen to everyone who tells you pursuing your dreams now can’t be done. Far too many college students are billionaires by their 30’s because they pursued their dreams in their dorm room. It’s what you go to school for anyway. Some even leave. While I’m not telling you to be a college dropout (although Oprah, Steve Jobs and others have done it) don’t wait to build your dreams later. Create time and go for it now. Chances are you’re not married with children, don’t pay much rent, and have the least amount of responsibility you will ever have in your life.
- Don’t Sign Up for That Credit Card. Handing over a credit card to a college student is like handing over the race car keys to an unlicensed driver. It may seem like easy money but newsflash, you have to pay it back. Focus on building your savings account not your credit score.
- Focus on Paying Student Loans Before Graduation. Start saving towards your college loans. You don’t have to be a graduate to do so. You can actually find ways to make payments towards loans while a student. Make small payments that at least cover the interest. Yes, you have a grace period but the longer you wait the harder it may become.
- Envision Your Life After College. What do you see? Where do you live? What countries have you visited? What does your home look like? Imagining your future will motivate you to make smart money moves today.
5 Hidden Risks in Retirement That Could Affect Your Financial Security
Being well-prepared for retirement is wonderful, but there is no fail-safe plan. Things can unravel due to many inherent post-retirement risks. Understanding those risks that lie ahead and how they can harm financial security is key to making critical adjustments in a retirement plan. Sometimes without those changes, the impact of unfavorable and unpredictable events can be far more severe.
“Once you have a retirement plan in place, it’s not set in stone,” says Clayton Alexander (www.retireteton.com), an investment adviser and founder of Teton Wealth Group. “
Alexander says retirees and those making retirement plans should be aware of these five risks:
Running outof money before they die is one of the primary concerns of most retirees. This worry is heightened by the fact that the average life expectancy has increased. “A pension or an annuity can lessen the risk, but carefully investigate anycompany where you’d place an annuity and be cautious of fees and interestrates,” Alexander says. “It’s best to tailor your plan to run to life expectancy plus five years.”
- Loss of income. “Make sure both you and your spouse are protected from the unexpected,” Alexander says. “Consider the financial impact of the loss of one spouse. Remember that your surviving spouse will only get the highest of your two Social Security checks. A spouse’s death can bring additional financial burdens, including lingering medical bills and debts. Life insurance and estate planning are important vehicles to protect survivors.”
- Health care costs. Longer life expectancy could lead to high costs in a long-term care facility. “It’s estimated that approximately 50% of people over 65 will need long-term care,” Alexander says. “Do not overspend on policies that may be subject to drastic premium increases. And surprising to some, Medicare is not free — your premiums for coverage are usually deducted from your Social Security check. Medicare doesn’t cover dental, hearing or vision, is subject to deductibles, and doesn’t cover long-term care. Long-term care insurance is advisable.”
- Negative return risk. “A 50% gain does not allow a portfolio to recover from a 50% loss,” Alexander says. “In fact, a 100% gain is required to restore a 50% loss. The ‘buy and hold’ strategy that works when you are young — where
you waitfor the markets to come back up after a downturn — does not apply inretirement as we saw in 2008,when many people’s retirements were wipedout. Common stocks have substantially out-performed other investments over time and thus are usually recommended for retirees as part of a balanced asset allocation strategy, but the rate of return you earn can be significantly lower than the long-term trends.”
- Inflation risk. “
You shouldplan on prices for food, goods andservices getting higher duringretirement, reducing your buying power incrementally as you are livingon a fixed income,” Alexander says. “Your retirement plan has to factorthat in. Ways retirees can curb the effects of inflation include annuity products with a cost-of-living adjustment feature and investing in equities, a home, and other assets.”
“Understanding what the potential post-retirement risks are and considering them in the retirement planning stage,” Alexander says, “can help to ensure that they are mitigated and properly managed.”
Are Americans Undervaluing Paid Time off + Quick Trip Tips
It’s August, which for many Europeans means taking almost the entire month off. So why is it difficult for Americans to take even the little vacation time they receive? A recent piece in The Economist states workers in the U.S. are doing it all wrong by going on short holidays, which can add even more stress or taking none. Instead, it’s essential for employees to recharge their batteries. It’s also beneficial for companies to have a consistent holiday month during which junior employees can head to the beach, and managers can take stock of things, says the report.
While many Americans may not receive paid time off, especially those that only work part-time, even those who receive it generally don’t take all of it. What we don’t realize is that not taking a vacation is like giving money back to your employer, especially with companies that have a use it or lose it policy. Which should encourage employees to use their time but unfortunately it does not. According to recent polls conducted by Bankrate, nearly 2600 US adults say they plan to take a quarter of their vacation days while 4% are not planning to take any vacation time at all.
Time off is a valuable perk, to the tune of millions of dollars! Just to bring the point home in 2017 Americans gave up 212 million days off that amounts to $62.2 billion in lost benefits! So, take your vacations and follow the tips below to not break the bank while taking time off:
- Take a Staycation – Stay local and vacation somewhere that is less than a day drive away, this helps save gas, mileage, and spending on lodging. Look for local attractions, vineyards, interesting museums and landmarks or even travel to your closest big city and be a tourist for a day. You would be amazed at how much you can discover and learn by staying local and all on the cheap! It’s a bonus if you have friends in the town your visiting they can serve as a tour guide and let you stay over for free if they have the room.
- Book Flights Off-Season – July 4th, Memorial Day and Labor Day seem like a great time to go on vacation; unfortunately, everyone is planning to take time off during those busy weekends, and ticket prices are through the roof because of it. Book flights after major holidays and during the week you will generally find that they are cheaper than weekend flights.
- Take a Road Trip – Road trips are fun and cheaper than taking a plane, especially if you must rent a car when you get to your destination anyway. Plan cool stops along the way and finds interesting places to eat that way you can make the journey part of the vacation.
- Plan to Eat In – Food adds up on vacation so pack food and making one or two meals in your hotel can keep you under budget.
Top Ten Freshman Money Myths
Starting college is one of the most important and exciting times of your life. Now that you’re all “checked-in,” enjoy your college experience without worrying about where your next meal will come from by chasing away these common freshman money myths. (more…)