As many students prepare to head to college at the end of summer, finance professional Mike Kabarec offers money management tips to young adults.
Mike Kabarec Offers Tips for College Freshman Finances
As a wealth advisor and investment management professional, Mike Kabarec understands that it takes time and strategy to build strong financial practices and accounts. As such, he notes that the earlier Americans start to plan for their financial futures-the better off they will be in the long run, especially if they also pick up a few responsible spending and saving habits along the way. According to Kabarec, most young adults do not feel truly financially independent until they have at least graduated from college-some may even not feel this way until later in life, such as in their 30s. However, he believes that young adults should start improving fiscal literacy and financial habits a lot earlier-such as when students prepare to head off to college.
Kabarec explains, “During college individuals experience a lot of unique challenges in adulthood. One of these major challenges is learning how to manage money in a proper fashion, as these behaviors will determine how an individual builds wealth in his or her future.” With summer in full swing, Kabarec notes that many graduating high school seniors are enjoying their last months with friends and family and preparing for their college adventure. However, he suggests that this time should also be spent setting up vital financial resources and behaviors as well. For this reason, he points to a recent article from The Huffington Post that outlines “five financial things to do before your freshman year of college.”
The most immediate responsibility that upcoming freshmen should tend to is financial aid. The article explains, “Unfortunately, even though you’re not in college yet, you already have to start thinking about paying your tuition. Financial aid also affects many of the other financial decisions you’ll make in college, and at the end of the day, if you aren’t receiving the appropriate amount of financial aid, you may not be able to finance your education…Scott Hawksworth, a financial aid specialist and founder of YesCollege.com…advises you to stay on top of your disbursements, which are the financial aid awards given directly to the university.”
While this process may seem fairly simple from the onset, making sure the money gets to the school and is disbursed correctly can be fairly complicated. In the article, Hawksworth adds, that the results [of not getting disbursements on time] “can be disastrous, including even having class registrations canceled or suspended.” He continues, “It isn’t a pretty situation for anyone, but such an event can be especially traumatizing for a student just entering college. To save yourself the distress, talk to your financial aid office about your specific deadlines and mark them down in a calendar. In addition, talk to your parents so they’re aware of what needs to be done to continue financing your education.”
Mike Kabarec responds, “Completing FAFSA requirements is something that freshmen should have addressed earlier in the year; however, with a few months left in summer there is a great deal of time for individuals to situate any college loans they may need. Students should fully research their loan opportunities to find out how to access the best interest rates and loan terms. The earlier one acts, the sooner he or she can find a proper cosigner to possibly reduce interest rates on the loans.” Kabarec also encourages individuals to even start planning their financial aid ahead of time for sophomore year, as getting ahead of the game is critical to making sure money is disbursed on time in a correct fashion.
Although it may seem like a simple suggestion, the article also encourages upcoming freshmen to make sure they have a bank account established for managing finances during college. The article explains, “Opening a bank account is not only a great step from a financial perspective, but also from an organizational perspective. Many students hold down a job or two in college and need somewhere to put their hard-earned money, and it’s much easier and safer to have it stored away in a bank account than to have random dollar bills in the back pockets of your jeans.”
While many students may already have bank accounts, the article notes that those enrolled in schools far away from home may find that the bank either does not exist, or its ATMs and banking facilities are not conveniently located. As such, many students may find that transferring accounts to a more nationally-recognized institution can make organizing finances much more feasible. In addition, this precaution could save many students from having to pay ATM fees with an unaffiliated bank. Mike Kabarec suggests, “When you are visiting your school, pay attention to what kinds of ATMs are actually on campus. You may want to open an account with these participating banks to make money management more convenient during your time at college.”
Kabarec adds that while it may seem hard to save during college, having a savings account with a valid bank is a great way to build up a lump sum of money that can be used after graduation. “When students graduate from college they often find that it is going to take a considerable amount of money to live independently, commute to work and take care of daily needs. Unfortunately, many of those who are unprepared may end up opening unfavorable credit cards and following a path toward debt. Those who make an effort just to put away a small portion of money into a savings account during college, however, may find that they are able to pay for these resources and transition into adulthood with greater financial confidence,” Mike Kabarec concludes.
Mike Kabarec is a trusted investment management professional who carries more than 30 years of experience in this challenging career field. Throughout his professional history, Kabarec has gained strong insight into what skills and knowledge is necessary to perform tax management, investment management, wealth building services, small business development and retirement plans. Today, Kabarec relies on his proficiencies in these areas to serve as President at Kabarec Financial Advisors, Ltd.—a Chicago-based investment management, financial and wealth advisory firm that has existed since 1982.