Choosing a degree is already a complicated thing, but when you add financial factors into the mix, it becomes even more complicated. But, it is something that needs to be done to protect you and your future.
While you may just be entering college and money matters may be the last of your worries, it is important that you do think about your financial situation and where you plan to be. A misstep along the way could mean that you are doomed to be unemployed with a large amount of debt. My 2 younger siblings are looking to select their college major over the next year and asked for some advice!
Below, I will go over why you need to consider your financial future when you choose your college major and we hope this information will help you.
1. What Is Your Projected Salary?
One of the first things you need to think about when choosing your college major is how much the position pays. Of course, you do not want to go into a field simply because it pays a lot of money, but knowing what your annual salary is projected to be can help you plan for the future.
For example, if you choose a career and degree that has an annual salary of $55,000, then you know how much to expect monthly and you can guesstimate what type of house you will have, how much you need to put away for retirement, and similar.
2. What Is the Job Growth Rate?
Next, you need to look at the job growth rate. This is important because if this type of job is being phased out, then you will likely be standing in the unemployment line at some point and this can have a devastating blow to your income.
You should choose the career you desire, but know what the projected numbers are and what to expect as far as whether or not your skills will be needed in the future.
3. Is There Room for Advancement or Further Education?
In addition to knowing the job growth rate for your position, you also need to know if there is room for advancement within your chosen career. If you are stuck in the same position with the same salary, this can have an effect on your pay. In fact, if there is no room for growth, you may not receive any type of pay raise, which means you will be stuck at your wage the entire time you hold that position.
This is not necessarily a bad thing, but if you are looking for the opportunity to advance or you want to eventually make more money, you need to be prepared now and switch your career choice before you receive your major.
4. How Do You Plan to Pay for Your Degree?
Another important reason you need to consider your financial future when choosing your degree is because you do not want to go into debt over your degree. For example, if your position of choice only makes $40,000 per year, but you have student loan debt of $150,000, then something is wrong and you may find yourself living closer to poverty than you want.
When you start to think about your degree choice, think about the cost of the degree as a whole, the cost of tuition, expenses, and more. The more prepared you are and the more money you can put out to pay for college, the better off you will be and the less money you will owe to the federal government. Also consider if your job will allow you to be eligible for certain programs such as student loan forgiveness or refinancing.
Side note: I was able to lower my monthly payment and pay less interest overall by refinancing my student loans.
5. Are There Any Financial Incentives?
You should also consider if your degree choice and potential position has any financial incentives that come along with it. For example, if you choose to be a nurse, there is a financial incentive to work on certain floors and at certain times of the year. This can be a hefty incentive in some cases and it will allow you to earn even more money than what your projected salary is.
If you are torn on what degree to choose, consider the above five things relating to your financial future and then make a decision based on your answers and research.
Is there anything I missed that should be taken into consideration from a financial standpoint?