By Emma Korstanje
“I work a part time job, I make $500 a month and I’m having trouble budgeting,” is a string of phrases commonly heard by Matt Goren, who teaches personal finance at the University of Georgia.
For many college students, taming their finances in such a situation may seem of utmost importance. However, Goren said focusing on that immediate situation shouldn’t be a student’s biggest concern. The concepts of budgeting, saving and avoiding debt, while valuable, should be of less importance to college students, said Goren, who instead encourages students to focus on learning skills that will get them into higher paying jobs.
“Managing your money as if you are in wretched poverty isn’t necessarily that valuable a skill when you’re making $80,000 a year,” said Goren. “But you need to get to the point where you’re making $80,000.”
According to Goren, getting to that point requires mastering long-term goal setting, which he considers a key financial skill for college students. In long-term goal setting for college students, the focus shouldn’t be on the current money situation, but instead on gathering skills to secure a better financial future.
This can at times seem counter to classic financial rules. For example, it may more sense in the long-term to forgo a paid part-time job in order to complete an unpaid internship that would provide more valuable experience and contacts for the student’s planned career.
“Usually in finance we talk about financial capital, literally dollars. But for college students, human capital means more. We value the average college student’s human capital, which is potential lifetime earnings, as $2.2 to $2.3 million dollars,” said Goren. “When you compare that to how much money you get from your minimum wage job or how much you have to go into debt from your student loans, it’s like, you’re $10,000 in debt…You’re really worth $2 million. And that’s the median.”
Courtnie Vickery, a third-year wildlife sciences major and pre-veterinary student at UGA has worked to find a balance between building her resume for the future and maintaining financial stability now. Though she balances a paying job and multiple monthly volunteer shifts, she makes sure that each is a resume builder directly linked to her upcoming veterinary school applications. For Vickery, this means that her paid job is in animal research and her volunteer hours are with a large animal emergency critical care team.
“Obviously I’m working these vet related jobs for my resume for the long term, to get into vet school and then become a vet,” said Vickery. “But I also know a lot of vet offices where you can just volunteer and not get paid at all, and I’ve tried to stick to the ones where you can get paid so I can have some spending money now.”
Unlike Vickery, not all students maintain a long-term mindset. Luckily, according to Goren, there are many resources available such as free websites, career development courses on college campuses, professors in a desired major, career centers and even parents to assist. The key becomes actually seeking out the resources available and practicing the techniques recommended.
“You might know that person is there, but you just don’t value that input at all because they’re not helping you pass your classes right now… Realize that those things are probably more important that this other stuff that you think is important,” said Goren. “If you don’t build the long term thinking now, you probably don’t even know what you’re missing. That’s the danger.”
Emma Korstanje is a student at the University of Georgia.