The Biggest Money Mistake College Students Make

If you avoided math and business classes in college like me, you probably get a little bored when studying financial charts.

Okay, not only bored but personally offended by all the numbers (and any kind of calculations involving letters).

I mean, letters are meant to be read not calculated.

Id rather try picking up sand with chopsticks than sit down to study math formulas.

Well, there is one simple math chart that every college student needs to see because it can help you avoid making one of the biggest money mistakes of your life.

Here is a simple chart showing how a simple $1,200 investment can grow over time:

This simple chart reveals how investing money early on in life will dramatically help you grow your money.

In 40 years, a $1,200 investment can turn into $37,691 (based on 9% interest rate). And if you kept adding $1,200 every year for 40 years into that same 9% investment, you would reap $479,641.54.

Heres a nifty compound interest calculator to help you experiment with different numbers:

Many college students dont think about investing or preparing for retirement and so many decide to wait until years after graduating college.

And thats the problem.

Every year we fail to invest, the more money we lose out on.

So dont make the biggest money mistake and start investing a little bit now.

Recommended Reading:

*Investment chart from Fool.com

3 Smart Ways to Reduce Student Debt

Photo by Alice Pasqual

Student debt forms a huge part of a graduate’s finances and reducing it is a challenge that affects anyone who should pay back loans incurred while in college. There are 17 million student borrowers in the US according to the Federal Reserve with $376.3 billion debts. The average monthly payment of a borrower under 30 is $351. That means that the average loan is $22,135 per person in this age group. Millennials feel the most pressure preventing them from purchasing a home or starting a business. Although it is not easy to manage college loans and still have something to eat at the end of the day or clothes to put on your back, playing smart when it comes to student’s liabilities can ameliorate the situation.

Refinance and Consolidate

One of the most obvious solutions is to find ways to consolidate and refinance your loan. The concept is simple, you are eligible to take out a new loan with better conditions because you might have a better credit condition now compared to when you were just first starting out or was a student. When you got your loan, you did not have a good credit history and therefore was considered a high risk by lenders. You were locked in with a loan with a high interest. Now that you have a job, you qualify for a favorable loan. Many comparison sites exist online to guide you in refinancing your loan.

Exceed Monthly Payments

For those who prefer to put a substantial part of their salaries into loan repayment, this is a strategy that will reduce monies owed significantly. As disposable incomes increase, set aside a fixed percentage of your wages to pay debts and loans that will lower the amount you borrowed at a faster rate. On top of automatic deductions, you can put money gained from windfalls such as tax rebates, salary increases, inheritance or lottery winnings towards your loan debt.

Debt Forgiveness

Debt forgiveness aims to cut you some slack but it does not mean that the amount you owe is written off completely. It might only provide short-term assistance to ease the pressures on borrowers. Debt forgiveness is a matter to consider once you are consolidating loans. You are not going to enjoy this break if you consolidate and refinance your loan. There are several ways to get your student loans written off or reduced. Joining the army, becoming a teacher or working for the public service will get your loans reduced provided you meet conditions. The Public Service Loan Forgiveness Program writes off the remaining balance on the loan provided that 120 qualified payments have been made.

Paying off student loans after higher education has been completed is a tough call especially if you do not have a high-paying job. However, with clever planning and strategy, you can get that loan fully paid by consolidating and refinancing, paying more than the amounts due religiously and even through debt forgiveness.

How To Effortlessly Transition From College Into The World Of Work

Photo by Jonathan Daniels on Unsplash

Only 27% of the working population in the USA require a college degree compared to the 47% who actually have one, according to PBSO NewsHour. This 14.9% difference means that it is difficult to find a job that matches your qualification. It gets even worse for millennials whose education does not prepare them for the work world. Hacking your way through college through time saving tips still does not adequately prepare you for the world of work. Transitioning from college into the world of work can be a stress trigger, which may lead to settling for a less paying job.

Preparing for the work world before job hunting through these three tricks should ease the transition.

Be Exceptional on Paper

The first contact between you and a potential employer is through your resume. Having all the degrees and an awesome personality is of little help if it is not correctly articulated on paper. Even though you have little work experience, you can write an eye-catching resume and a cover letter that gets you to the interview stage. Including the relevant skills and educational background is essential in such an instance. However, avoid misrepresenting your qualifications as this will definitely get you fired. Before the interview, make sure you carry out a detailed research on the organization, making a list of questions to ask that are in line with your career objectives.

Look for Internships to Diversify Your Skills

College is an expensive affair that may hurt your chances of getting hired to your preferred organization, especially if you had no part-time job. This lack of experience taints your resume as recruiters and employers prefer entrepreneurial individuals to fresh college graduates. Nowadays, colleges do not fully equip their graduates with relevant workplace information. This hands-on experience can be obtained from an internship. It is also at an internship where you can diversify and build skills such as teamwork, public speaking or even learn a foreign language. Such skills are attractive on your resume, and prepare you for the actual world of work.

Network With the Right People Through the Right Channels

More often than not, your degree will not automatically translate to a job opportunity. Having an exceptional resume with relevant internship experience may also not be sufficient to integrate you into the world of work. Networking with the correct people in your field of study might, however, result in a callback. Internships and organizational functions are an informal way to prepare for the world of work and network. It is also critical to realize that the effects of your social media presence may cost you for a long time. Learning how to network on LinkedIn may be pointless if your Facebook activity has damaging comments.

The transition from college into the work world is an intimidating process, especially with all the applicants for that same position. While your educational background accounts for something, it is tricks like creating an impressive resume, getting an internship, and networking that ultimately prepare and get you the job.

Reducing Your Heating Bill At College

Photo by Tran Mau Tri Tam on Unsplash

Simply paying for accommodation, food, and other basic living expenses can set you back over $10,000 per year when you’re at college. The truth is that when budgeting for their college stay, students often factor in their tuition fees and rent, but do not realize that electricity or natural gas can set them back between approximately $45 and $95 per month. If you are leaving home for college, before you start hunting for an apartment, it is important to think about ways you can save money.

Share rather than live alone

If you live in a studio for one, you will be expected to pay around $55 for electricity or $45 for natural gas. If you live in a three-bedroom apartment, on the other hand, you will pay considerably less (around $18 for electricity and $22 for natural gas). Pooling in resources by sharing an apartment with other students can help cut down costs on expenditures such as heating food as well. It will also save you time since you can share chores as well as heating and other expenses.

Consider renting an apartment with utilities included

Apartments that include utilities in the monthly rent can be rare indeed, but with the help of a rental agent, you just may be lucky enough to find a landlord willing to foot the bill for heat, water, garbage, and electricity. The rent may be a bit higher, so find out what the market price is in your area of interest. Make a quick calculation to see if you might not be better off paying for the utilities by yourself.

Don’t fall into the space heater trap

Space heaters can be a godsend on cold days, but many people make the mistake of thinking they can keep electricity costs down by limiting the time in which they use this type of heater. The truth is that on very cold days, the minute you close the space heater, you start feeling the cold set in. Even two low-wattage space heaters run for the full day would cost more than heating your home using a gas furnace. A space heater might save you money if you just want to heat one room, but the truth is that to live comfortably, various rooms will need to have a comfortable temperature –including your bedroom, living room, and bathroom.

Use the thermostat wisely

Rather than turning the heat off completely and using space heaters, consider opening your thermostat for a couple of hours early in the morning, then again at night. When the heater is off, warm up with extra layers of clothing and thick socks. Also, look out for ‘gaps’ through which cold air could be coming into your home, including gaps beneath doors, which you can easily fix by asking your landlord to adjust the threshold. If you’re lucky, you will find an apartment to rent that has a programmable thermostat, which you can turn off on the hours you are away from home, using your phone or any ‘smart’ device to do so.

Being a student is one of the best times in one’s life but also one that can be stressful in terms of making ends meet. By programming your heat use, sharing expenses, and simply wearing more layers, you can combat the cold and ensure you aren’t paying more than you have to.

Should Students Invest In Cryptocurrency?

This is a contribution by Lucy Wyndham.

Andre Francois
Should Students Invest In Cryptocurrency?

The news is full of good and bad stories surrounding cryptocurrency. Around the world there are 12,000 Bitcoin transactions per hour, while, the value of Bitcoin increased by more than 1000% in 2017, proof that cryptocurrency is a growing phenomenon which many people trust and rely on to make an income. So, with students knee-high in debt, should they smartly invest in this latest trend to reduce their student debt and make some spare cash?

Making money

There are three ways to make money with cryptocurrency. Students may select to simply buy coins to sell on at a later date. To make a profit in this way, the key is to purchase coins at a low price and wait for their value to increase before selling them on. However, the current selling price is fairly high, so it’s likely to be some time before the value increases enough for an investment to be worthwhile.

The second option for students is to accept cryptocurrency payments. Students who run small businesses to make a side income will find that this is a great way of coming into receipt of coins. A third option for students who are computer savvy is to mine their own coins.

The good and the bad

Most recently, a 21 year old college student made ten times his initial investment figure after sinking 80% of his earnings into cryptocurrency investments and, in 2016, a Sophomore student at MIT in Cambridge, Massachusetts made an estimated $20,000 in just four months by cryptocurrency mining.

However, it’s not all good news. Facebook has banned all cryptocurrency advertising over fears of deception and misleading adverts, which has resulted in a drop in the selling price of coins. Cryptocurrency is finding itself increasingly being hit by scams and over $600 million illegal trades have recently been discovered in South Korea.

To invest or not

If you’re a student looking to invest in cryptocurrency, it’s important that you take the time to learn the facts, including the risks, before plunging your finances into any cryptocurrency purchase. This includes researching the topic and ensuring you learn the cryptocurrency terminology, something which you’ll likely never have come across before.

Many people, including students, across the world have made money following sensible cryptocurrency investments. Students looking to follow in their footsteps should ensure they are educated before making the financial risk.