3 Personal Finance Basics that You Should Learn While Still in College

The biggest misconception about wealth building is “Money makes money”. In some ways, it does, yes. But only when in hands of those who know how to manage it well. People who know how money works and flows, and know that it’s the money that should work for them and not the other way around. When in college or high school, students often gather the bad habit of spending money carelessly for various reasons, thinking it’s their right and time to do so. While there is nothing wrong in spending some bucks here and there, problems start blooming for such people as the habit now sticks, in the later stages of life. Just being a student a good student of finance and simply writing a finance assignment that gets you an A+ won’t take you anywhere with your personal finances, or anywhere good in regard to your bank balance, for that sake. If that were the case, then the top billionaires of the world would have been the ones trading stocks on New York’s Wall Street, instead of those who are busy building their companies from their offices' of Silicon Valley,  accompanied by their mates of Palo Alto. Building wealth doesn’t come from books, and comes from small habits.

So before it’s too late and you too catch some serious ill habits of spending your money recklessly, let us have a look at some basics of personal fiancees that you should master while still in college.

Credit Cards are not Evil; But they Could be One Anytime

Today, there are only two kinds of college goers. Those who have a credit card, and those who don’t. While the first group has it by the virtue of their parents, the second one doesn’t believe in having one because they were taught how credit card companies fool people out of their hard earned money. But that’s not how the card works. Credit card companies give you monthly points and credit card score based on your spending habit. While the first one could help get a discount on many things, the latter one builds trust for among the banks. That helps you get an easy loan when you have decided to buy a car, home, or any other property. That’s why you should first learn how the system of cards works, before handing it to a salesperson for purchase of a new wheeler that took your fancy the other day.

Unlike your accounts class or account assignment, your personal budget book is not just a ledger of your cash inflow and outflow. It doesn’t mean you are a miser who is set to spoil all the fun of his college life. You should know the difference between what you need and what you want. Prepare a month plan. Put aside the money you would need for your necessities, and then save little for things that you want in the coming months.

The biggest blunder that parents teach their children about financial investment is that they should away from easy money of stock market. If used well, the stock market could be your best bet to accumulate large amounts of money over a period of many years. Accidents happen when you try to behave an expert of share market, and indulge yourself in selling shorts. Learn about the basics of stock markets for a good year or two, and then start investing with an amount that you can afford to lose. No big plans for a while, and no thinking that you could outsmart the experts.

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