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financialfreedominsight · 9 months

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4 Valuable Personal Finance Lessons I Wish I'd Learned in College

In hindsight, I can't help but think that a few key financial insights would have made my college years far less stressful. During those days, I embraced a frugal lifestyle, commuting from home and occasionally splurging on outings with friends. With my work-study job and internships, supplemented by my parents' support, I managed my primary expenses: transportation and food. While this approach did save me money, I now see that a few financially savvy moves could have yielded the same results without as much sacrifice. Here are the four personal finance lessons I wish I'd learned in college:

1- Opening a High-Yield Savings Account Earlier:

Living at home allowed me to save money I might have otherwise spent on student housing and meals. My parents also ensured I had some money in my checking account for emergencies. However, for three years, I let my extra cash sit in my checking account, earning no interest. It wasn't until my senior year that I opened a savings account, but it only offered a meager 0.01% interest rate. In hindsight, I should have opted for a high-yield savings account like the Marcus by Goldman Sachs High-Yield Savings Account or the Synchrony Bank High Yield Savings Account, both offering competitive APYs.

2- Learning How to Use a Credit Card Wisely:

My fear of credit card debt kept me from using my credit card extensively. While this prevented debt, it also cost me valuable rewards and benefits. For instance, I missed out on the opportunity to earn 3X membership rewards per dollar on flights through the American Express Travel portal. Even after graduating and getting my own credit card, I failed to maximize cash-back rewards by redeeming points for travel-related expenses, where they were worth 1.5 cents each, instead of using them for new purchases with Amazon at a value of only 1 cent per point.

3- Starting to Pay Off Student Loans in College:

Despite earning grants, scholarships, and work-study funds, I had to take out student loans to cover the remaining tuition. My initial plan was to wait until after graduation to start repaying these loans, following the six-month grace period. However, I later realized that my unsubsidized loans were accruing interest from the moment they were disbursed, even while I was in school. This meant I had to pay around $400 in interest, something I would have preferred to avoid had I known better.

4- Learning More About Real-World Finances:

My constant worry about money in college was rooted in my limited knowledge of financial management. The world of personal finance is complex, filled with jargon and acronyms that can be daunting. Looking back, I wish I had made a greater effort to learn the basics during college. This would have empowered me to develop better habits like budgeting and saving and spared me many sleepless nights.

These four personal finance lessons, if learned earlier, could have significantly eased the financial stress I experienced during my college years. They serve as valuable reminders to anyone embarking on their own personal finance journey, helping them make informed decisions and avoid common financial pitfalls.

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