Look, I get it, talking about money and finances can be dry and for some people might even be a touchy subject. I also understand that as a college student it’s way more fun to party and not think about your future self. However it is so important to make good choices with your money from a young age.

I’m not saying you need to start investing (although I would recommend starting a 401K or Roth IRA, but that’s a story for another day), I’m just saying that being conscious about your spending and saving money where you can will set you up to make better decisions 5 years from now.

People don’t understand the importance of money management, tons of adults just spend what they earn and don’t think about tomorrow. According to Market Watch, around 38% of Americans couldn’t come up with $500 without selling something or taking out a loan. What’s more shocking to me is that around 25% of Americans don’t have an emergency fund.

As a college student, I feel like an emergency fund isn’t at the highest of my priorities (I know I’m a hypocrite). To my defense, I hardly have enough money to pay my student loans and if I were ever to be in a real emergency my parents would help me out. So I’ve put that off until after I graduate and get a real job, once I do I will create an emergency fund.

Back to the main point of this post, the reason (in my opinion) that financial literacy is so important is because money runs the world. I don’t believe that money makes you happy, but I know that the lack of money will make you miserable. Whether you like it or not, money pays the bills and funds everything you do because EVERYTHING costs money.

The basics of financial literacy (in my opinion) include monitoring you credit usage, building a basic budget, and cutting out unnecessary spending’s. Simply put, you need to start paying attention to where your money is going.

I don’t want to be a typical finance guru here, I know that budgets are bullshit, or at least the types of budgets that are commonly advertised, they don’t work because they promote cutting back on your current life style. I don’t believe that, instead, I think it is important to make a list of the items you’re spending money on. After you have this list, rank them according to which items make you the happiest. Then, focus on cutting back on the items that aren’t making you happy, you don’t have to completely stop all spending on that item, but by slowly lowering the costs in these areas you’ll start saving more money each month. Then simply keep spending what you are in the areas that make you happy (if you really want to save money then consider cutting back) and use the extra money you saved to build an emergency fund, or invest it.

The mistake that most people make is that they cut spending in certain areas, but then use the money the cut to spend more in other areas, this isn’t the worst thing in the world because at least you are getting more happiness out of your money, but still, don’t be that guy.