Recently, avocado toast made headlines as Australian property developer Tim Gurner made news suggesting that millennials’ expenditures on overpriced food products, such as the aforementioned brunch item, was a reason for the generation’s lack of savings. This apparent lack of savings made millennials unable to make large purchases, like a deposit on a house.
Whether or not avocado toast will be the economic downfall of the generation, Gurner was right in saying that strong financial habits are important to begin earlier in life. These habits acquired now can give graduates a secure foundation as they enter the workforce.
Learning about money while still in college can help students prepare for post-graduate life. A recent survey by the micro-investing app Acorns showed that 71 percent of millennials feel uneducated about financial matters. For most students attending university, they have an advantage where they are able to deal with low-risk financial matters before having to feel the full force of them in post-graduate life. Students should seize the opportunity they have to advance in financial literacy while the stakes are still low.
One way to advance in financial literacy is by learning how to earn money. Getting a job during college can provide a variety of benefits for full-time students, according to US News and World Reports.
Aside from financial benefits, skills such as communication and time management can be acquired at the workplace. Not only can a job provide a resume boost or be good preparation for a future career, but students will have the opportunity to learn the value of a dollar.
Appreciating the effort that goes into each dollar made can have lasting impacts on other financial choices.
One such choice is deciding what to do with that paycheck. It is incredibly quick and easy to spend money, yet far from effortless to earn it. That being said, a paycheck should not be spent in a single night. Learning how to budget is key. Budgeting entails knowing what money to spend on needs and luxuries, knowing the difference between the two, and knowing how much to save.
For example, acquiring books for classes is a need; a $14.95 Bliss Bowl from Sunlife is a luxury. Luxuries are not bad things, however. In fact, students should be able to use their paycheck to enjoy themselves. While affording luxuries may not be realistic for some students, treating oneself to an enjoyable meal or experience may provide that extra boost of perseverance for an intense week.
Issues only arise when luxuries begin to take priority over needs or savings. Every purchase has an opportunity cost, illustrated by Miranda Marquit in her article “Understanding Opportunity Cost,” published June 10, 2015 by the Huffington Post. When money is spent at one place, it is unavailable for investing elsewhere, with the safest investment being the savings account. Being aware of this reality is critical for fiscal responsibility. Viewing every purchase as an investment can revolutionize one’s outlook on spending.
The most straightforward way to learn about money is to do research. Pursue financial literacy. While getting a job and budgeting are lessons only learned through experience, understanding credit, investments, loans, and taxes are more conceptual aspects of financial literacy that should be looked into. Beginning the journey into learning about personal finance is intimidating, but it is crucial to overcome any barriers that might have negative consequences in the future.
With Pepperdine’s new Center for Financial Literacy, students are gaining more access to resources in this area. As a previous article published in the Graphic illustrates, the opportunities here are abundant to prepare students in financial literacy for post-graduate life. For example, in 2015 Seaver College started offering a first-year seminar on financial literacy to allow for young college students to get a grasp on finances from the start.
Ultimately, the only way to have a strong financial base is to start building one. Even if it means forgoing that avocado toast, smart money decisions every day can add up to a secure financial future.
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