College Student’s Guide to Financial Independence: Part 1 of 2

Becoming Financially Independent is far easier when you start early. The financial decisions you make in your college life may establish a solid financial foundation when beginning your working life, or it may set you so far behind that there will be a slim chance that you ever retire before the age of 65.

While there are many faults with the current education system in the U.S., college was definitely some of the best years of my life. I distinctly remember the best parts of college: stale beer, missed classes, late night gaming sessions. Besides the classic “enjoy college, it will be the best years of your life”, I definitely wish people told me a little bit more about what to do while I was in college, and what life would be like after college.

While I understood the basic idea that getting a higher level of education was to improve your earning potential, I didn’t fully understand how absolutely necessary college was. I went to college simply due to the fact that the majority of my family members before me all went to college.

I am fortunate to have been in a childhood environment where higher education was the norm.

I understand that college may not “be for everyone”. If you are the type of individual who is passionate about an alternative idea or route in life, then it may be very possible that college is not for you.

However, if you do not have any entrepreneurial endeavors going on in your life and you do not have a college education, then I urge you to consider going back to a college to obtain your 4-year bachelor degree as the minimum prerequisite for life. I won’t get into the numerous specific benefits an additional year of education can provide in this article.

Instead, I will be providing a guide to FI for any reader who is still in college but is already sick of the idea of working for someone else. Looking at you Steven ;).

Welcome to my College Student’s Guide to Financial Independence!

Step 1 – Understand Your Life Goal – To FI Or Not To FI, That Is The Question

For part one of this two-part series, I will focus more heavily on the steps we can take to mentally prepare our mindsets for financial success.

Let’s revisit what this entire blog site is about… Financial Independence!

Financial Independence is a profound concept that is not at all common in standard society today. Financial Independence is an escape from the standard “work-spend” lifestyle. An escape into new territory where you are able to spend your time how you please and do work that is more meaningful to you.

Whether you want to travel to underprivileged societies and help altruistically, or maybe you just want to stay home and play video games while being high, becoming Financially Independent can help your dreams become a reality.

The first step any college student needs to ask themselves is, “Do I want to become financially independent, or not?”

There are many arguments in favor of becoming FI, my core reason as to why I want to become Financially Independent is that I want to structure my working adult life the way I see fit. I don’t want to be constrained to work at a job because of debt (or other financial) obligations. I want to be able to decide when I work, what work I actually do, and how I “retire”.

By today’s standards, we are expected to be educated from ages 5 to 21, work from ages 21-65, and be retired after the age of 65.

Just think about that… Spending the prime years of your life – working… If you are ok with the structure in place today, then why are you here? Just go away, stop reading, and live your standard life.

If you are dedicated to becoming Financially Independent, your working life could look like something below.

Starting with education from ages 5 to 21, work from ages 21 to 30, partially retire from ages 30 to 45, work from ages 45 to 60, partially retire from ages 60 to 70, work from ages 70 to 75, and finally, retire at age 75+.

Having a non-standardized life focused around Financial Independence can allow you to take on a part-time job and spend more time with your kids and family. It may even provide you the ability to travel the world for a few years and experience global cultures first-hand instead of visiting exotic countries as a tourist for 5 days out of the year. Becoming FI can unlock your wildest dreams by simply freeing you up from all the other activities that consume your precious time.

There can be many reasons to pursue FI, the most common reason being the ability to live your life in a way you see fit.

The structure where members of society spend 8 hours a day, 5 days a week, 50 weeks a year and 40 years in a life working for someone else is painfully archaic.

It takes an enlightened individual to see pass the “norms” we have been taught for so many years by society.

It is easy to be caught up in monotonous comfortable routines that do not challenge us. It is far more difficult to challenge standard conventions and apply effort towards escaping “The System” that we were all brought up to believe in.

To FI or not to FI?- that is the question. Only you can answer this.

The first thing any college student needs to do before reaching Financial Independence is first committing to the lifestyle habits, mindset, and culture that FI calls for.

Step 2 – Just Because You Are Not A Finance Major – Doesn’t Mean You Don’t Have Personal Finances

The number 1 thing that I believe our education system lacks today is a “Life Skills” course. Life skills can incorporate everything from cooking and cleaning all the way to learning to fix a flat tire or a leaky pipe.

The most basic component of the “Life Skills” course would be – financial education!

Why is it that we pay taxes through such a complicated system to fund our schools, which in turn don’t even educate us on how taxes work?

We can moan and groan about every single shortcoming of the American education system (like underpaid teachers, why do we have summer vacation still?, why we are falling further and further behind other countries in Math and Science? – I can go on…) OR we can focus on educating ourselves in the areas that traditional schools have neglected – such as personal finance.

Besides numerous articles that I have written around (1) saving, (2) investing, (3) and increasing your income, here are some very helpful basic financial and economic terms everyone should know/learn:

  1. Rule of 72 – Numeric guidelines on how long it will take your money to double at a given interest rate
  2. Compound Interest – The 8th wonder of the world – learn to make friends with it.
  3. Inflation vs Stagnation vs Deflation – Real Dollar Value – Understand how inflation slowly eats away at traditional savings accounts in banks today. Understand how stagnation in the minimum wage and wages overall will impact society and yourself.
  4. Pareto’s Law – The 80/20 rule explains many skewed situations in the world, like why 20% of group members in a team do %80 of the work.
  5. Opportunity Costs – Understanding the costs of taking action is the missed opportunity of another action not taken.
  6. Sunk Costs – know when to quit and give up
  7. Understanding “Risk” – Risk vs Reward – Risk Is Statistical Variance – 
  8. How mortgages (loans) are structured – What is APR? – How does your credit score affect your mortgage? Whats the difference between fixed and floating rates, 15 versus 30 yr mortgages, and principal payments versus interest payments.
  9. Supply vs Demand – Consumer Surplus vs Supplier Surplus – Learn to capture your own consumer surplus. For example, cooking your own meals is a great way to capture your consumer surplus.
  10. How Credit Cards Work – You use them, but do you really fully understand the pros and cons of credit?
  11. Basics of Game Theory – Nash Equilibriums – Understanding why people and groups behave the way they do in a given game or scenario. Why are fast food chains and gas stations always grouped up on the same corner?
  12. Understanding How Taxes Work – Federal/State/Local/Property/Sales/Social Security/Medicare & Medicaid/Estate Tax/Capital Gains Tax/Personal Tax Laws vs Small Business Tax Laws – Everyone pays taxes, it is worth taking the time to learn how they work.

This small list of vocab words and hyperlinks are all the key takeaways I obtained from my education and bachelor’s degree in Economics, Mathematics, and Statistics (and instead of paying tens of thousands of dollar, these links are all free!). I don’t expect everyone to become a tax specialist or game theorist based off links to Investopedia, but I do think that everyone can benefit from a basic understanding of how money works.

My hopes are that people begin to financially self-educate and avoid the most common pitfalls, like holding a credit card balance when your bill is due, or why putting all your money in a savings account is the opposite of smart.

With today’s level of accessibility of information, there is no excuse as to why you shouldn’t be able to learn how credit card companies make money today, what the difference is between a fixed-rate loan versus a floating-rate loan, or that tic-tac-toe games are pointless because they always end in a draw if both players know all the rules (Nash equilibrium of tic-tac-toe).

Whatever your current major or minor is in college, you can always benefit by learning about finance/economics and apply them to your own life.

You don’t need to be a finance major to learn about finances.

Step 3 – Be Okay With Your Current Lifestyle – Avoid Lifestyle Inflation

This is one tip that is not as widely spread as I would hope.

Specifically, avoid The Financial TRAP!!!!

It is endlessly frustrating when I read articles like this, “A Twitter employee making $160,000 a year says he’s only scraping by in San Francisco”. No! The employee in this article is not “only scraping by” in San Francisco. More accurately, he is a victim of lifestyle inflation.

Lifestyle inflation can become an incredibly toxic phenomenon in your life if you don’t catch it early enough. I was a victim of falling into this trap when I started working after college and received a significant increase from my $15/hr part-time job in college.

In college, I was very content eating at the dining hall or grabbing the cheapest slice of pizza on campus. I would still manage to have fun and memorable experiences without spending a large amount of money. I didn’t buy an excessive amount of clothes and I was very content (not happy with, but content with) with the 30 fps PC I had in college. If I wanted to buy something, I would’ve saved money from my part-time job for a significant amount of time before being able to afford it. For example, it took me 2 months of saving to be able to afford a $300 Nvidia GTX 770 graphics card senior year in college.

The spending habits we build in college (unless you unwisely spent your student loans, went into credit card debt, or have rich parents) are habits that should stay with us our entire lives if we are to become Financially Independent.

Once I started working, I began seeing numbers in my checking account that only appeared in my dreams. I wasn’t able to control my consumer urge to SPEND! Instead of patiently spending days, weeks, or even months researching items that I wanted, I was now able to buy anything at the touch of “1-click” (damn you Amazon! damn you…). Heck! If I didn’t have the money in my checking account, then I would do the math and buy things on credit knowing that the credit card bill was due the 14th of the month, and I would be able to pay off the card with the paycheck coming in the 12th of the month.

These types of habits are not admirable and are the root of the problem when it comes to this nation’s credit card debt topping 1 trillion dollars!

What would happen if I were to lose my job while living like this paycheck-to-paycheck lifestyle? I don’t know, but I recently read an article where two parents turned to suicide as a resolution to their “financial situation”. These types of situations are exactly the types of situations I hope this blog will prevent in the future.

I am not telling every college student to only eat cup-noodle for the rest of their life or that they can never take a vacation again.

Instead, the point I am trying to get across is to realize how much happiness you can obtain in life without spending money on worldly possessions.

So – let’s recap

Step 1 – Understand Your Life Goals and Dreams

Step 2 – Learn some basic finances, like the structure of your student loan

Step 3 – Avoid lifestyle inflation as much as you can

Stay tuned for next week’s article which will be the sequel to “College Student’s Guide To Financial Independence”, where I will go through the literal steps I would recommend to any college student looking to pursue Financial Independence.




P.S. If you found this article helpful, insightful, motivational, or just slightly entertaining, then make sure to like, subscribe, and SHARE!


  1. This is a great read! I think I already knew most of it, but it provides some great insights and I think the way you tell the reader how it works fits good to the subject (smart, to-the-point, casual).

    I’m definitely going to follow you, I believe there’s lots to learn (especially regarding the “Financial Trap” part… that’s something I should work on)

    1. Yessir! Me too me too.

      My cousin was actually the one to ask me to write this guide. Hope this article helps other students as well.

      As always Jay, thanks for the comment!

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