Meet Erin Bui, a college student who loves to splurge on boba. She shares with us the financial concerns of a college student and gives us tips on how to build a secure financial future with the right habits!
Hi, I’m Erin Bui. I am a college student. One of my biggest goals for the future is to start a family and be a wonderful mother. Growing up in a middle class family with financial worries at times, I really would like my children to be worry free when it comes to money.
Besides my student debt, these were passing thoughts I had:
- Am I too young and reckless?
- When can I start a family?
- What happens if I pass away at an early age?
- Who is depending on me at this moment and what will happen later on?
- Am I making the right decisions now to have a secure financial future?
- Will poor financial choices force my children to pay an oversized debt?
- Are they able to survive on tiny savings accounts I make for them?
- Will those accounts even matter when my debt is so huge?
After working at Mangus Finance, I started to develop a different perspective.
The reality is that I cannot predict what going to happen next in life. It is basically a matter of faith that I can get through the next day, week or year with no problems. It’s true I can’t control future events, but I can control how prepared I am to have a secure financial future.
1. Have an Estate Plan and Life Insurance
I know in the future I would like to start a family with kids. What would happen if I bring a child into this world and I leave him or her behind suddenly, and it’s not my choice? I know my child would be devastated but I cannot control that. What I can control is if their financial stability so they can grow up to learn how to take care of themselves. An estate plan and life insurance would accomplish this.
2. Have a Financial Plan (Budgeting and Emergency Funds)
I can also control the decisions I make today that ultimately affects my children’s future. I need to plan ahead, and figure out what are the necessary actions that I need to take in order to create a clear path for them. I need to have a financial plan.
- First off, I would start off with a monthly budget so I do not overspend. Looking back at my old bills and expenses I can figure out where I overspend and hopefully, I can change any and all bad habits. I looked at my overspending and realized that a lot of it was on boba and eating out. While I cannot live without boba, I have decided to keep a stricter budget on boba. Instead of going multiple times a day, I have decided to limit my boba runs to once a day, with a maximum of 5 times a week.
- Secondly, I managed my savings to create an emergency fund for unexpected events as well at the expected ones. Getting into the habit of a nice cushion gives me peace of mind.
3. Know About Credit Cards and Interests
Next, I have had to change my thinking around credit cards. In the past, I thought it was free money that I can pay back later, but looking at the interest rates on credit cards has made me realize that every time I put a boba drink on the credit card that costs $3-4 today, if I don’t pay back the debt right away, it becomes $10 in 5 years or $20 in 10 years. $20 for a boba drink is too much. As you can see, compounding interest can make a small and harmless cost into something ridiculous if you let debt go out of control.
4. Utilize Tax-Friendly Vehicles
Finally, it is important to use tax-friendly vehicles like an IRA, Roth IRA, 529 college savings (for grad school) or a whole life insurance policy to save up for the future. I work a campus job right now and I am already surprised what they take out in taxes. Anything I can do to lower that would be great.
5. Get Started – Build a Secure Financial Future Now
- Have an estate plan and life insurance
- Know about budgeting and having emergency funds
- Be aware of credit cards and interest rates
- Be knowledgeable on tax-friendly vehicles
These are the financial concerns of a college student. This process might be a headache for most people so having someone who is more experienced and educated would be helpful. We here at Mangus are here to help you build a secure financial future so that you can be free.
There is no greater place to be than to have peace of mind for the future, no matter what age you are.
Erin Bui is the Mangus Finance Circles specialist based in Riverside, CA, focused on helping special needs and senior communities with financial education and awareness.