8.1 Financial Goals and Realities

What Are Your Financial Goals?

Whatever it is you plan to do in your future, whether work or other activities, your financial goals in the present should be realistic to enable you to fulfill your plan.

Taking control of your personal finances begins with thinking about your goals and deciding what really matters to you. Here are some things to think about:

• Is it important for you to graduate from college without debt? Is it acceptable to you, or necessary, to take some student loans?
• What are your priorities for summers and other “free time”? Working to earn money? Taking nonpaying internships or volunteering to gain experience in your field? Enjoying social activities and time with friends?
• How important is it to take a full load of classes so that your college education does not take longer than necessary?
• How important is it to you to live in a nice place, or drive a nice car, or wear nice clothes, or eat in nice restaurants? How important in comparison to your educational goals?

There are no easy answers to such questions. Most people would like enough money to have and do what they want, low enough expenses that they don’t have to work too much to stay on budget, and enough financial freedom to choose activities without being swayed by financial concerns. Few college students live in that world, however. Since you will have to make choices, it’s important first to think about what really matters to you—and what you’re willing to sacrifice for a while in order to reach your goals.

Make More or Spend Less?

That often becomes an issue for college students. You begin by setting up a realistic budget and sticking to it. A budget is simply the best way to balance the money that comes in with the money that goes out.

For most college students, the only way to increase the “money coming in” side of the budget is to work. Even with financial support from your family, financial aid from the college, your savings from past jobs, and the like, you will still need to work if all your resources do not equal the “money going out” side of the budget. The major theme of this chapter is avoiding debt except when absolutely necessary to finance your education. Why is that so important? Simply because money problems and debt cause more people to drop out of college than any other single factor.

This chapter includes discussion of how students can earn money while in college and the benefits of working. But working too much can have a negative impact by taking up time you might need for studying. It’s crucial, therefore, whenever you think about your own financial situation and the need to work, to also think about how much you need to work—and consider whether you would be happier spending less if that meant you could work less and enjoy your college life and studies more. As we’ll see later, students often spend more than they actually need to and are often happier once they learn to spend less.