With any event, it is important to have a map of where you are and where you are going. Managing your finances is no different. Not only is it responsible to have a financial plan, it also comes with many benefits and few costs. I would like to focus on the importance of having a financial plan upon entering college and the urgency of creating one if you are student who does not currently have one.
When you step onto campus for the first semester of your freshman year, hopefully you have some savings from part time jobs in high school, graduation gifts, scholarships, some support from your parents, education funds, and maybe a few student loans to help you have enough cash to make it through your first year of school. However, as you progress through school, the tuition bills begin to add up, the scholarship money tends to get smaller for upperclassmen, and mom and dad may feel the need to teach you financial responsibility by letting you support yourself.
Without a financial plan, it is very difficult to know if you have sufficient funding and it is very convenient to spend money freely on eating out, going to concerts or movies, and other recreational events. Also, it is difficult to foresee upcoming problems with your finances if you neglect to take the time to consider what your financial future will look like. In the instance of not looking ahead, when problems do show up, they can be very hard to overcome. You may have used up all of your savings, scholarship money, and student loan money that was intended to last you through the entire semester before you realize you have a problem. In order to have the cash to pay the bills to get through the semester you might have to take on a job or even a second job if you already had one. Another option is to accept more student loan money, which can be difficult and can set you back upon graduation. Most students would agree, working while going to school and trying to juggle a social life can be extremely stressful. As you can see, not properly allocating your money has many adverse effects that go beyond not having enough cash. You can lose your free time, struggle to do well in your classes, and add unnecessary stress to your life all by not having a financial plan.
However, there is good news. With a few hours of time and some number crunching, you can be on the road to responsibility and financial success. With a financial plan there is potential to save yourself time, money, and stress. With all the benefits and such little cost, it seems silly not to have a financial plan.
Developing a financial plan is simple. First, you need to find out where you are. Take a look at your current resources and expected expenses for the upcoming semester. Calculate the savings you expect to use, your expected income and expected expenses on a monthly basis. If your resources do not meet your expenses, you know in advance that you will need to find sources to finance your need. By knowing this before it is an emergency situation, you give yourself the luxury of time to solve your problem. Once you have your plan in place, you have to execute and track your progress. Keep records of all your expenses (receipts, bank statements) and income (pay stubs, loans). By comparing your actual amounts with your estimates on a monthly basis you can see where you are going and if adjustments need to be made.
It is my encouragement to you to develop a financial plan and follow it closely. If you already have one and have not been utilizing it, please start. By being responsible with your money in college you are putting yourself on the track to get a fulfilling college experience, graduate with minimal student loan debt, and the potential to start saving and investing for retirement at an earlier age. However, it all starts with a financial plan so save yourself time, money, and stress and develop a financial plan.
If you’d like to meet with a Powercat Financial Counseling peer counselor to get free assistance in developing your college financial plan, please contact us at powercatfinancial@k-state.edu or call us at 532-2889. We’re students just like you and are here to help. We have more information about this subject on our website at http://www.k-state.edu/pfc/planning.
Matt Kiehl Peer Financial Counselor I Powercat Financial Counseling www.k-state.edu/pfc