Tips to get in control of your financial future and start a growing savings account.
By Nadine Boisnier
Guest Writer
It’s never too late or too early to start thinking about your financial future. What habits do you want to take with you after graduation? Do you want to feel secure and in control of your money? Before you jump into the work force, it may be beneficial to take a few moments to learn about managing your finances. These seven steps will start you on your journey.
1. FIRST THINGS FIRST, PAYING OFF CREDIT CARD DEBT
“The best thing to do is to pay off your credit card debt,” Sevan Babadjanian, investment adviser at Invest Financial Corporation said. “Shop around for the best credit card interest rate, and learn to systematically pay it all off.”
Even though mom and dad may be footing the bill, you will impress them by taking initiative to find out about other interest options available from other credit card companies.
If you state that you have found a lower rate elsewhere, the company will almost guarantee that they will lower your rate as well. No one wants to lose your business, so you have the power to make changes. Remember, the temptation to overspend can destroy your credit down the road. Try to use your card for emergencies and limit yourself to one card.
2. MAKE AN EFFORT TO BECOME FINANCIALLY SAVVY
Babadjanian suggests taking some time to understand money and investments.
“Be an active participant in your financial planning,” she said.
As a first small step begin glancing over the business sections of your paper. If you are an online reader, click onto the business section for a few short minutes.
“Keep up with the markets by reading and truly listening,” Babadjanian said.
You may not even understand a word of what’s going on, but after time things will begin to click. You’ll be proud of yourself for being aware.
3. DETERMINE YOUR FINANCIAL GOALS
“Begin making a list of all of your financial goals,” Babadjanian said. “After writing down each item, think about your time frame for achieving each goal. This could be for your future home, a new car and most important, retirement.”
The sooner you start thinking about retirement the better.
“A financial plan will help you determine the blueprint you need to achieve your goals,” she said.
4.ORGANIZE AND PLAN
“Set up a place where you can put all of your receipts, bills and expenses,” Babadjanian said. “This can be a great way to get organized and get a handle on your financial situation.”
If you know you want to make a big purchase in the future, think about the steps you need to take to get there.
5. CREATE A BUDGET
No one likes the “B” word, but you’d be surprised by how much it can alter your spending habits.
“Working on a budget and staying with it can change your life,” Babadjanian said.
“Make a note of all of your costs including food, gifts, travel, etcetera. Then take a good look at where you can make some small changes.”
This will help you make your money last throughout the semester and the entire year. Make sure your budget is realistic. After tracking your spending, you’ll notice things that you spend too much money on. Even a few dollars a week can make a big difference down the road.
6. START SAVING
“A lot of young people do not think long term, and they need to,” Babadjanian said.
This is a good habit to start now. Visualizing what you would like in the future is a good catalyst to saving. First open up a savings account in your name and tell yourself this account is for money that you will not touch. When your birthday comes around and you receive extra cash, put it in this account. Find out from your bank which accounts provide the highest interest. Through time your money will start growing for you, and you’ll feel more secure that you have a little nest egg to rely on.
7. USE CASH
Using cash for purchases allows you to become more aware of the value of money and how much things cost. Although swiping a debit card or credit card is more convenient, you are less likely to keep track and more likely to spend more. Take out some cash for the week and try as much as possible to spend within that limit. You will notice that you will be thinking while shopping, and this is the first step to becoming more aware of your finances. Also, try to buy only what you need. When you leave college and earn a good salary, then you can begin to purchase what you want.
Having a small foundation of financial knowledge will impress family and friends, but more important, you will feel in control of your future.
“The most important thing to do is to get started,” Babadjanian said. “Don’t put yourself into more debt, and don’t spend more than you can afford.”
Words to live by.
— Nadine Boisnier has a master’s in communication from Pepperdine. She currently works at an investment company in Santa Monica. Questions? E-mail nadineboisnier@hotmail.com.
February 20, 2003
