6 Steps to Financial
Freedom as a Student

Being a college student comes with a lot of demands—balancing school, work, and the ever-present pressure of financial uncertainty. The purpose of you getting a college education is to set yourself up for a successful financial future, but you don’t have to wait to get started! With the right resources and guidance, you can start building a strong financial foundation now, even while you’re still earning your bachelor’s degree. Here are some tips that can help set you up for success.

 

Start Building or Improving Your Credit Score

A solid credit score is more than just a number; it’s your gateway to financial freedom. As a student, establishing or improving your credit score should be a top priority. While it’s tempting to use your credit card freely, it’s crucial to manage it wisely. Keeping your credit utilization below 30% is key to maintaining a healthy credit score. For instance, if you’re approved for a credit card with a $1,000 limit, aim to keep your balance under $300. Exceeding this threshold can start to chip away at your credit score.

Why does this matter? A strong credit score opens doors to favorable loan terms, whether for a mortgage, car loan, or even another credit card. The difference between a good and great credit score could save you tens of thousands of dollars over the life of a mortgage. For example, on a $400,000 loan, just a 1% difference in interest rate could mean paying $96,690 more over 30 years.

 

Budgeting: The First Step Toward Financial Control

Budgeting is the cornerstone of financial stability. Start by tracking your net income, whether it’s from a part-time job, internship, or another source. Next, list your expenses—both fixed (like rent, groceries, and utilities) and variable (like dining out and entertainment). Review your last three months of bank statements to get a clear picture of your spending habits.

If your expenses outweigh your income, it’s time to reassess and make cuts where possible. Alternatively, consider picking up extra shifts or exploring side gigs to boost your income. Budgeting not only helps you manage your current finances as a student, but also sets the stage for saving toward larger goals, like a down payment on a home.

 

Buying a Home While You’re Still in School

Can I buy a home while I’m still in school? At Treadstone, the answer is a resounding yes! You have to live somewhere—why not make it an investment? When you’re renting, you’ll never see any of that money again, but when you buy a home, all the money you put into it builds equity! You might think buying a home is out of reach, but what if we told you, it’s easier than you imagine? You don’t need a massive down payment—just the right guidance and the right loan. At Treadstone, we offer programs like down payment assistance and options to have a co-signer for your loan, so homeownership can be within reach even as a student. It’s not just about finding a place to live—it’s about laying the foundation for your financial future. Let us help you take that first step toward building equity and long-term wealth.

 

Unlocking Financial Freedom As a Student with House Hacking

House hacking is a smart and creative real estate strategy where you purchase a property, live in part of it, and rent out the rest. For first-time homebuyers and investors, it’s an attractive way to keep living costs low—or even eliminate them altogether. Imagine starting your journey toward homeownership while still in school, building equity, and setting yourself up for future financial freedom. If your post-graduation career aligns with your field of study, you may not even need two years of pay stubs to qualify for a mortgage. By embracing house hacking, you’re not just saving money; you’re making a strategic move that can accelerate your entry into the real estate market and open doors to long-term success.

 

Talk to a Financial Advisor: Professional Guidance is Invaluable

After you’ve started to build your financial knowledge, sitting down with a financial advisor can help you tailor your strategies to your personal goals. While the first few conversations might feel overwhelming, regular meetings will deepen your understanding and help you take more tactical steps toward financial success.

 

Open an IRA: Start Saving for the Future Now

It’s never too early to start saving for retirement, and an Individual Retirement Account (IRA) is a great way to do so with tax advantages. You can choose between a Traditional IRA, where contributions are tax-deductible, and a Roth IRA, where withdrawals in retirement are tax-free. Setting up an IRA is simple: choose a provider, complete the application, fund your account, and select your investments. Mutual funds or ETFs are a solid choice for first-time investors, as they offer diversification with lower risk compared to individual stocks.

 

Final Thoughts

Your college years are a time of learning and growth, but financial literacy often takes a backseat. By taking control of your finances now as a student, you’re not just preparing for the future—you’re creating it. Remember, money itself doesn’t buy happiness, but it does buy freedom. What you choose to do with that freedom will define your journey to success and fulfillment.

Source: Bacon, 2024. Treadstone Funding and its employees are not CPAs or financial advisors. Not financial advice. All information provided is for educational purposes only.