Nine Things Every College Student Should Know About Money

1. You've Got To Have A Plan.

   You need to create a financial plan. A financial plan is a roadmap that outlines where you are and where you are going financially. One would think mapping out your financial life would be a huge undertaking, but it is actually quite simple. A financial plan only has two sides that need to be managed. That is revenue vs. debt. Making it even more simple, it's money coming in versus money going out. The secret to financial success can be summed up in one sentence. SPEND LESS THAN YOU MAKE. That's it! Spend less than you make and you will be financially successful.

2. Hey, You Got A Dollar I Can Borrow?

   Anytime you use someone else's money to purchase something you are borrowing and it must be repaid. Borrowing has been around since the beginning of time. The reason entities will allow you to borrow is because they make a profit from loaning you money. With that in mind, it is almost always best to pay cash when making a purchase. Interest NOT paid equals money saved. In other words, "Cash is Cool" and should always be your first choice when making a purchase.

3. Charge !!!

   Another type of credit is called "revolving". As the word revolving infers, there is no end. You make payments at the interest and credit limit offered in an open-ended financial relationship. Understanding credit cards is no simple matter. Always remember if you pay your balance in full every month, there are no penalty or interest charges. It's just like using cash and many people prefer to carry a credit card rather than large sums of cash. The problem comes in when you don't pay your balance in full.

4. They Are Watching.

   Don't get freaked out about it because we're all being watched. "They" are the credit bureaus and they're watching how you handle money. They know who you are. They know what your personal information is and they know whether or not you're handling money properly. So, if you have a checking account, they know about it. If you have a credit card in your name, they know about it. If you have a car loan, they know about it. And, if you make a mistake, they will know about it.

5. If It Sounds Too Good To Be True..

   It is human nature that all of us want to get rich quick. That's who we are. We want to go into the store, buy the lottery ticket, hit the lottery and walk out a millionaire. The reality is that statistically speaking you have a better chance of walking across campus and being struck by lightning than actually winning the lottery.

6. Appearances Can Be Deceiving.

   You typically only bring home 65% to 70% of what you make. If your gross earning is $1,000, you will only bring home (net) about $650-$700 of that money. That is what you should make your plan around.

7. The Most Important Bill You Need to Pay Is Yourself.

   Consider yourself as an expense. When you put together that financial plan and you're putting down your needs, the top line of who you need to pay should be yourself. Take a percentage of your income (a lot of people like to use ten percent) and you'll find that you can live just as well on 90% of your income as you do off of 100%. Take that percentage and put it away into some interest bearing vehicle and don't touch it. Let it grow.

8. The Younger, The Better.

   Each one of you has going for you the single greatest factor in the creation of wealth. It doesn't matter who you are, who your family is, how much money Mommy and Daddy has, how much money you have in your pocket right now or what kind of car your drive. It's time. . . . . . the fact that you're young. The fact that you're young puts you in a position to create tremendous amounts of wealth. It's called the Rule of 70.

9. So You Want To Be A Millionaire?

   The Rule of 70 is this. You take money and put it into some type of an interest bearing vehicle and then you take the amount of interest being earned on that money and divide it into 70. As an example, use ten percent. So, if your money is earning ten percent interest, you divide ten percent into 70 and that means that your money is going to double every seven years. The earlier you start the more chance your money is going to have to double.