Ways to start planning now for tomorrow’s success

In the hustle and bustle of student life, textbook rentals and daily expenses are often top of mind. Saving and investing can seem like distant concerns.

In the hustle and bustle of student life, textbook rentals and daily expenses are often top of mind. Saving and investing can seem like distant concerns.

However, experts emphasize that the financial choices people make in their young adult years can profoundly shape their future.

According to a recent National Financial Educators Council report, Americans who are uninformed about personal finance lose $1,819 per year, on average.

Making important financial decisions now adds up in the long run, and for BYU students, the best way to start is by getting informed.

Sophomore Ethan Silver, a pre-finance major, said it is OK to start saving a little every month and then build on that. It is smart for students to start investing as soon as they can, he said.

“I don’t have like a lot of leftover money from paying for school. I’m still working. I have a car and all those other different expenses,” he said. “But I think a priority also as a student is thinking about your retirement.”

Saving for the future, even just a modest amount each month, can yield substantial benefits over time. For instance, an individual who saves $100 monthly for retirement at age 25 can accumulate nearly double the savings by age 65, compared to someone who starts saving at age 35.

As students navigate college and contemplate career paths, the transition to adult life may seem daunting. Financial milestones like homeownership and starting a family are often just around the corner for recent graduates.

Scott Condie, an associate professor in the​​​ BYU economics department, said students should align their savings goals with their short-term, medium-term and long-term financial needs.

“The short-term financial goals are things like, do I have the tools that I need to be successful in my life? Do I need to save for a car? Do I need to have a better apartment or a better house?” Condie said. “Then long-term goals are things like retirement or serving a mission when you’re older.”

Investing can seem scary, Silver said. He invests in what’s known as an ETF (Exchange-Traded Fund). With an ETF, he can own a tiny fraction of a basket of securities, which serves as a long-term investment strategy.

“I feel like sometimes people put (investing) in the same category as gambling. In the Church, gambling’s really bad. But I think with investing, you just got to keep it simple. At this age, we’re not making any big investments,” he said.

Unlike individual stocks, which typically carry higher risks for potentially higher returns, ETFs offer diversification across multiple assets. Both Condie and Silver emphasized that for long-term investment goals, minimizing risk is often more important than chasing high returns.

Condie said ultimately, being informed is the best way to prepare financially for the future while still in school, as well as learning to talk about money in healthy ways.

According to a study from Couple Family Psychol., one of the most often cited reasons for divorce was financial problems, at 37%. Learning to manage finances together and communicate openly about money matters and can help couples navigate potential sources of tension in their relationship.

“Those skills, how you talk to your partner about money and how you listen to your partner when they talk about money, all of those things are fundamental as you get older. And they are things you can practice now, even if you don’t have a lot of money,” Condie said.

For students interested in enhancing their financial knowledge, courses at BYU can offer valuable insights and practical applications.

SFL 260 (Family Finance) provides an introduction to essential financial concepts such as the time value of money, budgeting, saving, credit, taxes, housing, insurance and investing, with an emphasis on practical application in household finances.

FIN 410 (Investments) delves deeper into investment strategies and principles, focusing on topics like portfolio management, asset allocation and risk assessment. Prerequisites include a finance major.

ECON 450 (Financial Economics), taught by Condie, offers a more mathematically intensive exploration of investment, building on prerequisites like econometrics and microeconomic theory.