Jane Hao

Investing might seem like a foreign idea limited to the “finance bros” and “Wall Street Warriors” of the world, but financial literacy is equally important for all UT students. Since college is the time to develop positive, life-long money habits students should remain more mindful of their spending.  

Although picturing ourselves five, 10 or even 50 years from now can be anxiety-inducing, it is important to start planning early. Education on the investment, retirement, and wealth-growing process — while terrifying — is crucial. 

For instance, 401(k)s, individual retirement accounts (IRAs) and brokerage accounts provide a support system for retirement. Roth IRAs are a great place for students to put money if they are working lower-paying, entry-level jobs. 

Psychologically, we are inclined to spend our money on the newest and best items — an economic phenomenon known as present bias. When Apple released the first iPhone in 2007, people rushed to buy it. While many people found it tough to understand the value Apple stocks had back then, if they had made a purchase they could have turned over significant profit. 

“If you can cut down your current consumption it’s going to make you better off in the long run,” said Charity-Joy Acchiardo, director of the Financial Responsibility and Economic Education Program. “You’re going to be more knowledgeable about the market and investments for the different assets that are out there that can only help you later on. Even if you’re investing and you chose all the wrong crypto you’ve learned something about it and will make you a better investor later. I would say, get involved.” 

Most college students budget their spending since they lack a steady source of income. Since attending college is already costly, managing excess money carefully is a wise move. Budgeting tools like Excel spreadsheets, Mint and other apps can provide students with a helpful visual of their expenses. 

In addition to budgeting tools, students can also dabble in online brokerage accounts to manage money.  Applications like Robinhood and E-Trade are a great place to start. As you invest, remember that patience is key and the rewards rack up over time. 

“​​I just feel like I haven’t spent the time to educate myself to do it successfully and it’s not something I’d want to go into blindsided by doing something not responsible with my finances,” said neuroscience freshman Lauren Talley. “So it’s something I would want to do if I knew more about (online applications for investing).” 

Although early education usually doesn’t cover comprehensive financial education, researching these options and applications can provide significant benefits. Considering the erratic nature of investing, students must take precautions by conducting thorough research, diversifying their portfolios and starting with small sums of money. Furthermore, students must prepare for the possibility of losing some money in the short term.  

Ultimately, however, finances are an important aspect of adulthood and impact many facets of our lives. Now is the time to achieve financial security and set yourself up for success.  

Shenoy is an economics sophomore from Houston, Texas.