As stimulus checks hit the accounts of millions of Americans, there’s one population that’s feeling a bit left out: college students. Many of us have lost our jobs, our housing, and don’t qualify for the stimulus check. Whether you’re entering college, in college, or about to graduate, you probably have questions about what to do with your money. It’s a scary, uncertain time, but I hope that these steps give you some answers.
Pay Your Loans
If you’re graduating this year, I know this probably isn’t what you wanted to hear, but it’s the unfortunate reality for many college students in the U.S. Financial Advisor at LPL Financial Julie Hankes recommends paying off your loans as soon as possible. “I am rooting for loan forgiveness,” said Hankes. “but I don’t think that is coming anytime soon.” However, there is a silver lining. Federal loans aren’t currently accruing any interest and some loan servicers are offering deferment periods if you qualify. If you don’t qualify for deferred payments, Hankes recommends paying the minimum payment for as long as you can. Each loan servicer is different, so you’ll have to contact them and ask what they can do.
Start Thinking About Investing
The stock market being down means great opportunity for investing. Talking to a financial advisor is always helpful, or there are websites like MarketWatch that help you practice investing with fake money before you commit to the real deal. The Acorns App is another great way to dip your toe in investing. It has 4.7 stars on the App Store and average to above average ratings from investing websites. The app simply rounds up your purchases to an even number and invests the difference for you. All you have to do is link your credit card and checking account. For example, that $3.40 coffee you got from Starbucks, will be rounded up to $4.00. Acorns will then invest the 0.60 cents into your portfolio. (You can choose which purchases you want rounded or you can choose automatic.) Did I mention it’s free for college students? If you’re expecting a fast return, this app may not be for you. But if you’re patient, I say go for it. If you’re ready to commit to real investing, Robinhood is a popular app to do so. The completely free app allows you to invest and customize your portfolio.
Save Your Money!
If you’re unsure of what to do with your money, just save it! It can be tempting to online shop, buy food, or stop by Starbucks every now and then, but putting your money in savings is the best thing you can do right now. Then when you need it, you can have it. Think of right now as a financial vacation. You’re no longer spending money on brunch with friends, Happy Hour drinks, or candles. To keep yourself motivated, try coming up with a savings goal. It could be for a trip with your friends when all of this is over, new makeup or skincare you’ve always wanted, a new pair of shoes, the list goes on. It’s okay to treat yourself after everything you’ve been through. It’s also a good time to establish an emergency fund if you don’t have one already. An emergency fund is a sum of money set aside as a safety net for potential financial mishaps or unexpected expenses. According to a Bankrate Survey, 41% of U.S. adults have enough savings to cover a $1,000 emergency while 28% have no emergency savings at all. Here’s why having an emergency fund is so important. If you’re unsure of how to start or build an emergency fund during an emergency, The New York Times has a great article about it here.
Avoid making decisions based on fear and uncertainty
It’s easy to be scared about the future after this pandemic. Hankes said that even financial experts are struggling to predict what will happen after this. “We often look to the past to examine market trends, and how certain investments did after past market crashes,” she said. “but the impact on the market from the coronavirus is a new variable that we have no history to compare it to.” It’s important to remember that no good decision has been made under fear. No matter the uncertainty, Hankes is remaining hopeful. “As hard as these downturns are, hopefully a greater recovery will follow,” she said.
Start Thinking About Your 401k
This best applies to those who are currently in, or about to be in the workforce. Hankes recommends investing as much as you can in your 401k. “Pre-tax dollars are the best kind of dollars,” said Hankes. “Especially if they have a decent matching policy.” It may seem crazy to think about your retirement right now, but it’s never too early.
Stay Current!
There’s no need to watch the news 24/7 or overwhelm yourself with constant updates, but keeping an eye on what’s happening across the country and across the world is crucial. With our current situation, things are changing daily. I personally love listening to The Daily by The New York Times for my daily dose of news. I try to go for a walk every morning while I listen to it. If you have access to cable, keeping up with the news through local TV stations is another good option.
Educate Yourself!
Learning about money and how to manage it is not a skill that we’re born with and luckily, you don’t need to be a business major to learn how to manage money. It may seem scary and intimidating at first, but the internet is your friend! Use it. There are so many podcasts, websites, and books that will teach you everything you need to know about getting good with money. My favorite podcasts to listen and follow are The Dave Ramsey Show and The Financial Confessions. If you’re more into reading, The Broke Millennial and The Financial Diet are great resources as well. I also follow The Financial Diet on Instagram for daily tips and inspo.
Apply For Unemployment
Yes, college students do qualify for unemployment benefits if their job was affected by COVID-19. It doesn’t matter if you worked part-time, full-time, or independently. How much money you get through unemployment varies state by state, but thanks to the recent stimulus package, anyone who files for unemployment benefits will get an extra $600 a week.
Appeal For More Financial Aid
If you and/or your parents’ jobs have been affected by the pandemic and you can no longer afford tuition, you can file an appeal for more financial aid money. Even prospective college students can file an appeal. You can call your college’s Financial Aid office for more information, as each college has a different process for appeals. Some colleges have an appeal form on their website. Others ask the family to write a letter summarizing the circumstances that have affected the family’s ability to pay for college. Any amount of money counts!
