Financial resolutions for college students: Strive for goals and thrive for the new year

January 3rd, 2013 by Ken 1 Comment »

New year's resolutions can fade faster than the fireworks. Get back on track ASAP!

Already three days into the New Year, and many are breaking down on resolutions they were so sure of on December 31. Every year people fail to meet their own resolution expectations mostly for two major reasons.

• The resolution did not really involve any commitment and was only superficial.
• The amount of work involved to achieve the resolution was far greater than realized.

Setting big goals is a good thing, until the goals are so big they become insurmountable and one gives up. There is no shame in setting a goal and failing, but one should acknowledge the amount of work necessary to make a resolution succeed before setting the intention, or again it’s a set-up for failure. This is especially a sticking point for the young and ambitious because the imagination of achievement outpaces life experiences in dealing with these types of challenges.

After a few days of reconsideration and reflection on positive life changes one can make, let’s revisit some viable financial resolutions that college students can implement and follow through with for a prosperous new year. These five resolutions are simple and direct while carrying long term benefits.

1. File the FAFSA on time: Take action with this very achievable short term resolution. The new 2013 – 2014 Free Application for Federal Student Aid (FAFSA) is now available for new and continuing college students. Don’t delay, get this important form completed ahead of your state or school deadline to ensure maximum financial aid funding eligibility. Maximizing grants and minimizing loans can reduce the cost of interest during repayment for years to come.

2. Time to “Plug In” your budget: Electrify your budget with some digital tools available to help keep you aware of your money on a monthly basis. Now more than ever there are handy programs that can help you track spending and savings to paint a clear financial self-portrait. Keeping a disciplined budget is nothing new, but the technology to help do it has made it easier. The problem for many is just staying motivated to even track a budget consistently, especially if income is limited. Instead of being discouraged, decide to utilize a budgeting tool to increase personal financial management ability. Gain this skill while working with a small budget so that you are more prepared with a larger budget in the future. There are plenty of options available to help in this endeavor, so look for no or low cost alternatives like Mint or Budgetpulse and take control of your budget.

3. Always pay your friends back quickly: Have you ever loaned money and not been repaid? Or perhaps you are out with friends but short on cash so someone covered your bill in exchange of your IOU only to forget about it shortly after. (Whooops!) Well, the digital wallet is taking the excuses out of repaying friends. Just connect your checking account to a digital wallet service provider, and anytime you owe some money to a friend, you can forward it to them electronically instead of using cash. Check out Dwolla, an already popular digital wallet alternative that can allow payments to be processed right from your phone, or Venmo a similar digital wallet program that taps into your social media account to help forward any payments to your friends. Demonstrate responsibility with money by always paying people back, while simultaneity harnessing the power of technology to improve your financial know-how.

4. Debt management now: Resolve to handle your debt before it handles you. If you are currently in college, and have any outstanding student loans, start making at least a partial payment each month to help build credit history and reduce interest costs. If you are recently graduated, look into a consolidation for federal loans, as well as a consolidation for any outstanding private student loans to help organize and manage repayment.

A good habit can ultimately pay for itself. A bad habit costs more than you realize.

5. Replace a bad habit with a good habit and “profit”: New Year’s resolutions commonly include quitting cigarettes or giving up certain non-nutritious foods, and it’s important to identify these unhealthy habits before they can be eliminated. But this is only half the battle carrying half the motivation to complete it. That’s because when a bad habit gets wired into the mind it will remain a sensitive focus point that will require constant handling until something else more enjoyable or important becomes the motivational focus point. For example, the person that wants to quit cigarettes may find it stressful to see others casually light up in front of them because they so badly want to partake in the same activity. However, if the smoker is more concerned with healing their lungs so they can improve their cardio and more actively play with their young relatives then a new and more enjoyable motivation takes control of the person. No longer do they dwell on the loss of cigarettes, rather they focus on what is gained through increased health! So if you are trying to quit a bad habit first stop doing it. Second, pick up a new healthy habit like always exercising 3-4 times a week. It may feel magical, but it’s just a simple rearrangement from bad habits to good habits for positive benefits. An added motivational factor is money! Unhealthy habits are often a costly excess, and eliminating them in favor of positive habits usually yields a financial gain both immediate and long term. A person spending lots on junk food would do well to reduce that cost and save the money. A reduction in bad foods should lead to increased health and reduced long term health care costs and/or time spent away from work to see Doctors. Instead of fighting the bad habits all the time, move to good habits and gain benefits along the way.

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