It seems like an obvious connection—if you’re a student and you want to be financially successful, you need to know a lot about economics and finance, right?
Not necessarily.
The fact is that having a degree in finance, economics or some other money-related field doesn’t necessarily mean you’ll be a success.
So what does? What is the basic financial knowledge students should know?
A lot of it falls into the category of common sense. The first thing students need to know is that adult debt is an ironclad obligation.
It’s not something that goes away over time, so the sooner you understand that and minimize and manage the amount of debt you take on the better off you’ll be.
Financial life lesson #2 is about budgeting. It’s not an option. You should at least know how to do it, largely because it will at least give you a fundamental blueprint that will allow you to stay financially solvent.
The next category is savings. Savings is a habit students need to get into and build up over time. Over a quarter of all US workers never save money on a monthly basis, which means a job loss or an economic downturn can quickly turn into a personal disaster.
Learning the savings lesson is directly tied to investing. Many people struggle with a life-long fear of investment, but it’s not really all that hard to understand. A simple savings account represents an investment, and there are other solid forms of investing that are just as easy to understand and implement.
The concept of sacrifice is closely tied to both savings and budgeting. We live in a society that tends to be largely defined by instant gratification, but being a slave to instant gratification is a path to failure when it comes to money and finance.
Simply put, you need to follow a budget and put off unnecessary purchases if there’s something more costly that you want to buy down the line.
Its a basic concept, but making sacrifice into a habit will serve you well when it comes to holding onto your money and using it effectively to enhance your life.
