After years of a set path in school, you may find yourself wondering what’s next. Whether you have a plan or are still figuring it out, the one constant is making sure you can fund whatever your future brings. This doesn’t mean you need to have thousands of dollars in the bank, but being smart about your money now will help ensure that you have it when you need it later. Here are a few ways to help fund your future.
Learn the Language
Do you know the difference between a checking and savings account? What about a 401(k) and an IRA? Don’t worry, there are plenty of adults who don’t fully understand these terms either! Whether you know a few terms or none at all, taking time to learn and understand different financial terms can help you better manage your finances and your future.
Don’t let it become overwhelming though. Identify and focus on a few key areas you’d like to learn about, such as retirement funds, bank accounts, or investments. Once you feel comfortable in those spaces, you can explore a few more. Funding your future will be much easier when you understand the what and how behind it.
Make a Budget
One of the most important ways you can plan for your financial future is to make a budget. Write down what your net pay is each month, all of your monthly expenses, any potential additional expenses you may have, and any wants that you have. Having a clear picture of how much money is coming in and going out each month, you’ll better understand how to allocate your funds. You’ll also be able to see where you can make adjustments to save more money.
The 50/30/20 Rule
There are plenty of guides for how to allocate your funds to ensure you’re setting yourself up for future financial success. One of these is the 50/20/30 rule. In this rule, you should spend 50 percent of your budget on essentials (rent, car payments, etc.), aim to put 20 percent of your paycheck into a retirement fund, and leave 30 percent available for nonessentials like dining out and shopping. Take a look at your monthly paycheck to see how much you net, and then take that amount and divide it up using the percentages noted here. This is a guideline and the numbers can be adjusted to fit what works for you. The overall idea is to ensure that you are putting away some funds every month while still being able to fund your current living arrangement.
Identify Needs Versus Wants
While it may seem like needs and wants are the same, they can be very different. For example, you need to eat, but you may want to eat out at a restaurant with friends. No one is saying that you can’t do this on occasion, but doing it every night could hamper your ability to put away funds for a rainy day. You may find that as you begin to build your financial resources, your wants take a back seat, or become a bit less frequent. Once you’ve built up your finances, you may have more flexibility for wants.
Save Your Savings
There will most likely come a time when you’ll be tempted to dig into your savings for a non-emergency. Don’t do it! It will be much easier to avoid this if you make it more difficult to access your savings. This may mean having the account at a different bank than your checking account, or ensuring there’s no debit or credit card linked in any way to the account. That harder it is for you to access the funds, the less likely it is that you will use them for non-emergency purposes — and the more likely your savings will grow and be there for you in the future.
There are many different ways you can set yourself up for financial success. It’s important that you determine what works for you and your lifestyle. For many, financial stability, and the ability to fund your future the way you want to, does not happen overnight. Putting in the time to understand your finances, your needs and wants, and how you can make your money work for you will pay off in the long run.
On Topic
Micah Jewett, Cheyenne River Sioux Tribe, is a journalism student at Colorado State University.
What are the best resources for students to find scholarships and other funding opportunities?
The day you turn 18 the queries about your future flood in. The one that always lingered in the back of my mind was how will I pay for college? As I progressed through high school and became better prepared to answer the unknowns — where I was going, my major, even what dormitory I wanted to live in based on how far it was from my classes — the only question left was how I was going to afford to further my education. The answer: scholarships. There are so many companies, organizations, tribes, and individuals who want to help educate the future students and professionals of the United States. A huge resource for me was AISES. The first AISES National Conference I attended was my sophomore year of high school. I still had braces and a learner’s permit. The College and Career Fair at this conference opened my eyes to how many people want to help you, fund you, and watch you succeed. College fairs occur everywhere, all the time. Go to them and learn about the schools, the courses, the professors, and the financial aid. The financial aid office at any school is a great resource for students. The internet is another amazing resource. Type “Scholarships for Native American Students," “Scholarships for people who are left handed,” “Scholarships for first-gen college students,” or for anything that you can relate to into a search engine and find an abundance of opportunities. Complete a profile on websites, including Scholarships.com or FastWeb.com, and you will receive an email you when an appropriate scholarship is uploaded. You have to look, because the perfect scholarship for you is out there.
