As a senior college student preparing for launch into the “real world,” I think about finances quite often.
What is the fastest way to pay off my loans? How much money do I really need to make after graduation? What does insurance cost?
There are so many questions to ponder, and the answers are not always clear.
This summer, I was at a gas station when a woman decided to say hello and talk to me about “financial freedom.” While I was initially confused by the random interaction and her poor explanation of the concept, I looked it up and found it is quite similar to my own money goals. Coincidentally, it appears that more and more people are striving for it, too.
Financial freedom is the idea of having little to no long-term debt and having a dependable enough savings account to rely on when things get tough. Oftentimes, people are living paycheck to paycheck and their lives can be derailed by unexpected expenses, such as car repairs or medical needs.
As college students, most of us have minimal money in the bank or savings for emergencies. In fact, some may even be relying on their parents to support personal expenses during these expensive years of life.
But when graduation day comes, it is time to start supporting ourselves as much as possible and taking care of our finances — responsibly.
Whether you make $30,000 or $90,000 straight out of college, you need to spend it wisely. Do not go buy a brand-new car just because you can afford it (kind of).
Pursue paying off any student debt you may have, preferably sooner than the standard 10-year repayment plan.
Make sure you have enough money saved to take care of any emergency expenses that arise.
Start thinking about retirement, even if you can only set aside $25 each month. Be prepared for the unfortunate scenario of losing your job, or not finding one for a while.
We tend to live in the here and now, and getting our first big paycheck is exciting. However, finances are not just about the here and now. Planning for the future, whether it be in a few months or 40 years, is so important for living a comfortable, stable life.
Some people may have the option to return home if things ever get too rough, but that is not always the case.
You do not have to obsess over a “financial freedom” mindset and follow a step-by-step savings strategy, but you do have to be responsible and be prepared for unexpected things life may throw at you.
Money is not everything, but it is necessary.