Top 5 Personal Finance Tips For College Students

What's happening

It's Shane here, and in today's video, we're gonna be talking about the top five

personal finance tips for college students. Now this is gonna be a list of the top five things

that I wish I would have told myself back when I started college

and the top five things that I think are the most important when it comes to personal finance for a college student

And if you are able to get these five things down, it is going to make a world of difference

It's gonna be like night and day, and you're gonna make the rest of your life a lot easier

But before we get into that, let's make sure to gently tap that like button. Let's set a goal for 1,000 likes on this video

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But anyways, let's get into it. Number one on this list is to learn to play defense

before you learn how to play offense. Right, and I'm not talking about basketball or football

This is just a money metaphor. So basically what this means is learn how to save

and budget your money, right? So if offense is making your money

and then also investing your money, then defense is saving money and learning how to budget

And the only problem with offense is during a lot of your life

while you're young specifically, you don't really have all that many opportunities

to make money. Usually you have to go to college, you have to learn something, maybe like an apprenticeship to learn a trade

You'd have to start a business and usually the first few years you're not gonna be making very much

So it's very difficult to learn how to make money and even more difficult to learn how to invest it

while you're young, just because you don't have all that many opportunities

But what is just as important as learning how to make money

and learning how to invest your money is learning how to keep it, right

Learning how to budget so that you can actually save money and keep the money that you make and invest

And just to prove this in case you don't believe me, 70% of professional athletes end up going broke

and 80% of lottery winners end up filing bankruptcy. These are people who have millions and millions of dollars

They have so much money that they could probably have like 10 or 20

or a hundred different people retire on the amount of money that they make during their career

or in the case of lottery, how much money they get from the payout. And yet in many cases

they still end up losing it all and they go bankrupt. Why is this

Because they had the offense part down, they made all that money

but they didn't have the defense part down. They didn't understand how to budget and save

So the defense part is something you can practice at any time during your life

You can learn the basics of budgeting and you can learn the basics of saving money

But that brings me to number two on the list, which is budget, but don't spend too much time on it

Now I see a lot of YouTube videos where people basically get super, super detailed

with their budget. Like they're tracking every single penny that goes in and out of their account

and in and out of their pocket or their wallet. And some people will even say, I spend like an hour a day doing my budget

And to me, that is just absolutely ridiculous. Avoid time-wasting tasks where you're trying

to kind of like manage your money too much. So this would include budgeting, of course

because if you spend like an extra hour a day on your budget in order to save like an extra dollar or two per day

I mean, that's really not gonna make that much of a difference. You could just use that amount of time

that you were budgeting and like pick up extra hours or go do some kind of side hustle

And even if you're making like five, 10 bucks an hour, you're gonna end up making more money

doing things that way. But this also includes things like extreme couponing

which in my opinion is usually going to be a total waste of time

You know, you spend like an extra 10 hours a week in order to end up saving $50, that's $5 an hour

You could have just worked like a minimum wage job and you would have made a lot more than that

Now that's a great thing to do if for whatever reason you don't have access to a job

but if you're able to work a job, you can just work extra hours, do some kind of side hustle

do Uber, you know, anything like that. And it would be more worth your time

than spending all this time sorting through different magazines and newspapers and stuff like that

Another example of one of these things is wasting too much time thinking about credit card points

So there's like a very basic credit card strategy that you should understand

You know, I have a few credit cards and I use them strategically to, you know, save money

But some people just go way overboard with it and they have like 20 different credit cards

and they're monitoring like, oh, during January, February and March, this one is gonna, you know, give me 3% back on gas

which is a little bit better than the 2.5%. So they're like constantly like switching

their credit cards out and just, they spend all this time on like credit card forums

reading about other people's experiences. And they could have just taken all that time

that they did that and learned a skill that they could have used to made like way more money

right, and instead they ended up saving like maybe an extra 100 bucks a year or something, right

But they could have like, like I said, learned a skill to make more money

or they could have just worked extra hours. So I'm all for credit card points and everything like that

You should definitely do that, but do it smart. Don't waste too much time on it

Just get the basics down, you know, just get a couple of really good credit cards

and you are good to go. And there's honestly a lot of other things that I could use as examples of things where you're

you know, wasting your time doing too much of something. But yeah, I'll go ahead and leave it at that

Number three on the list is going to be start investing as early as you possibly can

even if it's just a tiny amount of money. It used to be that most people did not start investing

until they were in their 30s. And a significant reason why that was

is many of the brokerages had minimum amounts that they required for you to open an account

So it would be something like $5,000, $10,000, et cetera. And the truth is a lot of people

especially these days with student loans and house payments, et cetera, they aren't gonna have $10,000 of disposable income

for a long period, a lot of the time until they're in their 30s. But these days there are so many different

investment options for you. You could literally pick up your phone and download an investment option right now

and start investing. And not only would you have the incredible power

of compound interest on your side, which is basically where during your lifetime

$1 is gonna turn into like 10 or $20 down the line

if you invest it long enough. Whereas if you wait until your 30s, 40s, or 50s

to start investing, that $1 might only turn into like $5. Now the magic of compounding investing is super important

and I think that's awesome. But I think most people have heard about that before

If you invest like $500 a month into a Roth IRA, for instance, all the way through your lifetime

you are going to be retiring as a tax-free millionaire. This has been proven over and over again

There's Roth IRA calculators all over the internet. You can do the calculation yourself

You are going to retire with millions and millions of dollars but I think even more than the power of compound interest

it's just the simple fact that you get started investing, right? When you open up your phone

and you see that your investments are going up, like, oh, you open it up, you see your investment going up

you get this a little adrenaline rush. It feels really good. And there's really just a psychological aspect

to getting started investing as soon as you can and it gets kind of addicting

And that is a very good addiction for you to have as long as you invest wisely, of course

So the sooner you start doing it, the sooner you're gonna get more comfortable with it

and that is going to lead to you really getting into investing

And then it's gonna be so much easier for you to do things like number one and number two

which is save and budget because the more you save and the more you budget

the more you're going to get to invest. And it's also going to be easier for you

to do the next two on the list. And the next one is going to be number four, get a job

Right, I know I probably sound like a boomer saying this but this is a very important thing

for you to do during college and honestly, if you can during high school

I would say during college, getting a job is even more important

than having good grades. And the reason for that is because if you don't have work experience

it's so much more difficult for somebody to train you. And I know from personal experience

I've trained people who worked while they were going to school and I've trained people who didn't work

while they were going to school. It was their very first job and the difference is night and day

And it wasn't because the people who worked were much smarter than the people who didn't work

It was simply just experience. It is so much more difficult to train somebody

who has zero work experience versus somebody who has some. And hiring managers, business owners, et cetera

they all know this. So not only are you going to learn key skills

and these are kind of soft skills, things you can't really learn out of a book

You just have to be there, you have to do it. It's on the job training type of skill sets

So not only are you gonna learn those skills but on top of that, it's going to look so much better

on your resume when somebody sees that you were working during college

So even if you can pick up, like seriously, just like even if it's like a half shift every two weeks

or a half shift every month, as long as you get to say you worked part time

during college, it's gonna look a heck of a lot better than someone who didn't work at all

And even if you're somebody who's like, you know what Shane? I'm going to college but I don't plan on getting a job

I'm gonna be an entrepreneur, okay? I'm never gonna work for anybody else

I think that's a really bad mindset because how are you gonna be able to be a good boss yourself

if you've never been an employee before, right? Like it's so much easier for you to put yourself

in somebody's shoes if you've been in their situation before like it's so much easier to be a good manager

if you've had a bad manager or maybe you've had a good manager before

and you kind of have seen the contrast between those two. So even if you get a job and it's kind of a crappy job

you don't really enjoy it, that's gonna set a bar for you

And so in the future, if you get a better job, it's gonna feel a lot better

You're gonna actually appreciate it because you know that it's better. And then on top of that

you're just gonna learn so much no matter what direction you end up going

So definitely get a job during college without a doubt, no brainer, just do it

Number five on the list is going to be to invest in skills and education

Now, education is one of those things where college used to have a monopoly on it, right

Pretty much the only place you could get educated was college, but it's no longer like that, right

There's so many different areas that you can get educated in. There's lots of different websites out there

where you can take courses from people who are pros at whatever they're teaching

It's also surprisingly and ironically cheaper in many cases to get one-on-one teaching from somebody

than to actually go to college where you're gonna have like 40 other students

in a classroom to one teacher. No, seriously, like the amount of time

that you spend in the classroom with a professor, if you just took that same amount of time

you could pretty easily in many cases just hire somebody who is a professional

or who's really good at whatever skill you're trying to learn to coach you one-on-one

And I'm not even kidding about that. Like these things are out there, they're available

You can look at websites like fiverr.com. There are people who post it on Facebook Marketplace

Craigslist, et cetera, right? So there's so many different ways for you to get educated

College is a great choice depending on the career path you're going down

And then also just learning skills. So another career path you could go down is trade, right

You could become a tradesman, an electrician, a plumber, HVAC mechanic, et cetera

These are skills that are very valuable. They are things that society needs

When somebody's toilet breaks, you gotta fix their toilet, right? Like they're not just gonna leave it like that

They're gonna get that toilet fixed ASAP. And that's why plumbers are so needed

You can also learn skills and go down the entrepreneur route. That is a great route for some people to take as well

Some people have zero interest in that. You just wanna work a nine to five

and just live a normal lifestyle and that's great. Some people want to go the entrepreneur route

because maybe they want to make more money or maybe they don't wanna make more money

They just wanna be able to do something they're really passionate about and make the same amount of money

as they were making in their job or maybe just enough to live. So there's a lot of different reasons

that people go for that, but that is another good option as well. But getting a job is great

Investing in skills and getting educated is gonna make it to where you are able

to get a job that pays you a lot or you are able to create your own job as an entrepreneur

And all of these things kind of feed into each other, right? So if you get really excited about investing, for instance

that's gonna make you want to make more money, right? And then when you make more money

you're gonna be saving more money and you're gonna be figuring out how to budget all that money

And then that's gonna make you invest even more. And then all of a sudden you get to retire early

and enjoy the rest of your life on a tropical island, hopefully. That's all I have for this video

Hope you enjoyed it. Check out my other videos right here. I made them just for you. Go ahead, gently tap that like button

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et cetera, that you have on the video. And I will see you next time