Any day now you’ll be heading off to college (if you’re not already there). And that means you’re going to have a lot to do and a lot to think about. What do you think the chances are that you’ll be thinking about saving money?
Odds are that it won’t be one of your priorities. But it should be. The typical college student knows that money is always tight, so it’s best if you find ways to save when and where you can.
There are at least two ways you can look at saving – short-term and long-term. Short-term saving happens while you’re at school, while long-term saving occurs once you graduate, get a job, raise a family, etc.
Let’s take a look at the first approach and what you can do to stretch your dollars:
Select the right savings account. Look for one that has a competitive interest rate and that has few or no fees. Many financial institutions have accounts that are geared specifically toward college students and their needs. BankFive offers a Student Savings account designed for college students who are looking to put money away and earn a competitive interest rate. Before deciding which savings account is right for you, check and compare your options online, or ask friends and fellow students for guidance.
Come up with a budget. You’ll soon be cramming for quizzes and tests, so who has time to come up with a budget? All those numbers, all those details – it’s just too much, right? Well, no one says you have to create a plan that accounts for every nickel and dime you spend or earn. But at least start out with some ballpark figures – how much income you can expect in a month, and what your expenses generally will be over that same period. Getting a handle on both sides of the ledger should help you save.
Avoid impulse buying and spending splurges. Retailers in college towns are tuned in to what students want, even if they don’t need it. They’ll entice you with special “student sales” and bargains that can be hard to resist. But you can, and you need to. Think about what you really need versus what you really want. And be honest with yourself. Sure, a new fleece jacket would be great, but don’t you already have three in your closet? Think it through before you shell out the bucks.
Seek out student discounts. Yeah, we just told you not to be suckered in by those “student sales.” But there are legitimate discounts you should take advantage of, like student specials on things you could use. It could be 15% off your bill at a take-out eatery, or 10% off classroom books. Search for these types of deals and take advantage of them. And if you’re in a store that doesn’t advertise student discounts, ask if they have them. As they say, nothing ventured, nothing gained (or saved!).
Now let’s flip over to the long-term side:
Start saving as soon as you can. The sooner you start socking the bucks away, the sooner you can take advantage of something called compound interest. Simply explained, compound interest means your money has the ability to make more money because you’re earning interest on previously earned interest. Think of it as free money!
Make monthly contributions to your savings account. If you have to start out small, that’s okay. $25 a month adds up over a year, and at least it gets you headed in the right direction. You can always increase your contributions as your income increases. But it’s important to get the process in place and stick with it.
Handle credit wisely. Ah, the temptation of credit cards. Every college student will be hearing from credit card companies offering them great rates and perks. And it’s so easy to sign up for one! But be sure you know exactly what you’re getting into. Are you going to get smacked with a big interest rate after that attractive 0% introductory rate expires? Are you prepared to pay off your credit card bill every month so interest charges don’t accrue? If there’s one thing that hopefully you’ll learn during your college years, it’s to avoid those things that can sap your ability to save now and in the future.
Starting your college career is exciting, and can be a bit overwhelming too. But, if you start out with sound savings goals in mind, and put some thought and effort into your finances, you’ll be on the right track for a bright financial future.