Robert Farrington is a paid influencer for Citizens Bank, N.A. All opinions and/or advice are his own.
Everything is relative when it comes to financial success. When you’re a high school graduate, the average individual probably isn’t even thinking about money. But the above-average high school graduate… he or she is thinking about what it takes to springboard success to the next level.
Did you know that the average net worth for today’s high school graduates (and pretty much all millennials) is negative? Yes, negative…
But the above average high school graduate - looking onto college and a successful career - doesn’t want to be in the negative. Here’s five money tips for the graduate that wants to be in the top 1%.
1. Know All The Pie Slices For Paying For College
The average high school graduate going to college will look at their financial aid letter and accept it and take on student loans for the rest of the bill. The above average student realizes that paying for college is like a pie - and there are a lot of different “slices” of money that can be used to pay for college.
We're talking about:
A lot of average students dismiss a lot of options on this list, such as scholarships and grants. But the above average high school graduate knows these are a gold mine for paying for college.
For example, Ramit Sethi at I Will Teach You To Be Rich shares how he received over $100,000 in scholarships to pay for college.
But too many people don’t take advantage. For our Side Hustlin’ Student Scholarship, we only receive about 100 entries per year. And about 70% of people who enter don’t follow the directions and get disqualified immediately. That leaves only about 30 people trying for a $2,000 scholarship. That’s great odds! And, speaking to others who run scholarships, the statistics are very similar.
If you’re still looking for scholarship opportunities, check this one out from our partner at Citizens Bank.
2. When It Comes To Borrowing For College, Borrow Smart
Most high school graduates going to college - even the above average ones - will need to borrow money via student loans. 71% of students take on student loans to pay for college, according to Student Loan Hero.
But there’s a big difference between average students and above average students when it comes to borrowing. The above average high school graduates looking to pay for college borrow smart.
That means, they’ve calculated how much it will cost to go to school, they know what type of job they want after graduation and know how much it pays, and can see a clear path to their return on investment.
A good rule of thumb for borrowing smart is to never borrow more than you expect to earn in your first year after graduation. That helps you keep borrowing costs down to a level you can likely manage and be financially successful.
When you do borrow, maximize Federal loans first. Once you maximize those, you can look at private loans. Look for private loan options that offer flexible repayment term and interest rate discount opportunities. Citizens Bank has these features and can give you funding for all four years of college if needed.
3. Working Through College Is A Good Thing
The average high school graduate thinks that they need to focus on school and not do work - “that would be too much”. They might get overwhelmed with the idea of studying and working, or simply think they should focus all their time on school and not a job.
But the above average high school graduate knows better. Working through college is one of the best things you can do for your future career.
Coming from someone who previously hired a lot of college graduates, I can tell you first hand that there is a significant difference in individuals who worked through college versus those who didn’t. Those who didn’t struggled more in interviews, rarely were hired by my organization, and when they were, struggled to be successful.
The above average graduate who wants to work during college will benefit from gaining stronger communication skills, workplace problem solving skills, and other soft skills that you simply cannot learn in the classroom.
What that does is not only allow you to earn more in school, but it allows you to be more valuable and earn more after graduation.
4. Being Financially Organized Is Key
One of the biggest reasons people fail with money is lack of organization. They don’t know what’s coming in, what’s going out, how much they have, and they don’t have a system in place to track it.
The above average high school graduate is diligent with being financially organized. He or she tracks her money, whether by using a free online tool like Mint or Personal Capital, or by maintaining a journal or spreadsheet.
By being financially organized, you can start to get a clear picture of your income, expenses, savings, and student loan debt.
Financial organization is what sets the above average graduate apart from average.
5. Start Investing To Maximize Time In The Market
Finally, the above average high school graduate is ready to start investing in college to maximize the time their money is in the market. In fact, the above average high school graduate may have already started investing in high school.
I started investing when I was in high school, and continued to invest more and more throughout college. This allowed me to start growing wealth early, which put me on the path to financial independence much sooner than most people even understood what was going on with their money (see being financially organized above).
Maybe you have some graduation money that you can invest? Maybe you are working and want to start investing with that money?
No matter where you’re finding the extra cash, the above average graduate will be putting their money to work for them, not buying random items that lose value over time.
Graduating high school is a big step forward that comes with a lot of changes. For those looking to be “above average”, there are simple steps you can take at every turn that will allow you to set yourself up for a comfortable financial future.
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him here.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.