In college we all learn lots of things that, hopefully, will help us throughout life. Many of us learn how to work in teams, how to better communicate with others, and how to take new information and apply it in various ways. Lots of college grads also learn technical skills such as how to perform surgery, argue a court case, or write computer programs. Unfortunately, the one thing we don't learn in school is how to manage our bills wisely.
To keep on top of your bills, and learn to better manage your personal finances, there are a slew of routine measures you can take and strategies you can use to get ahead financially. But college grads of all ages would do particularly well if they understood the following lessons—and then applied these lessons in their everyday lives. With that said, here are five critical money-management lessons you didn't learn in school, but should have:
Everything always costs more than you think it will.
Even millionaires have a budget.
Your credit standing is as important as your degree.
Credit cards and student loans are not free money.
Saving now saves problems later.
1. Everything Always Costs More Than You Think It Will
I used to think that only young college grads made the mistake of underestimating how much it costs to live in the real world. After working as a money coach, however, and talking to countless individuals about their monthly finances, I've since discovered that people of all ages, incomes, and education levels fall into this trap.
For example, a 35-year-old trying to save for retirement might think that having $1 million in the bank 20 years from now will be sufficient during her golden years. The truth is, she may live to be 90 or even 95. If she wants to have an early retirement, at age 55, she needs to make sure she has enough savings to last 40 years in retirement—and $1 million probably won't cut it.
Beyond the dream of a comfortable retirement, everybody in this country wants something—from the mundane to the extraordinary. More often than not, there's a price tag attached to the things we want to buy, do, have, or achieve.
For example, getting an education is a costly endeavor, as you well know. It's not just about performing academically or being willing to spend years in school studying and taking tests. You must also come up with the financing for a higher education—these days, anywhere from $20,000 to $30,000 or more for a four-year degree.
Think about virtually any goal you'd like to accomplish—whether it's buying a home, traveling around the world, taking a photography class, or just being able to paint on the beach whenever you'd like. All of these things come at a price. Unfortunately, most people vastly underestimate the true cost of reaching their goals. And even when people put an accurate price tag on the cost of having or experiencing the things that they want, they overestimate their own financial resources and their ability to pay for those items.
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How EdFed Helped others!
When I first called EdFed I was impressed by the customer service. With other companies I called it was always an automated system that picked up and if I was lucky I was transferred to a live person. The Loan Counselor that I spoke with at EdFed was knowledgeable and quick to answer any and all questions I had. I was also able to get my application e-signed that same day. Now, thanks to EdFed, I have saved over $200 in the past two months. - Jessica S. Des Moine, IA
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Education is one of the most basic right of any human, but with the increase in prices and the costs involved in education this has made these rights turn into a privilege which very few can enjoy. Any normal person today in the whole of United States has to take an education loan at one point of time to pay for their education fees.
While you are attending school and after you graduate, be sure to establish and protect your good credit rating. Make all loan and other payments on time; use cash instead of credit cards; and monitor your spending habits.