For the majority of college students, saving money for the future is not a top priority. Between classes, homework, extracurriculars, and social events, it is challenging to focus on anything but the here and now. These demands, combined with the lack of financial education that is provided to most college students, make it unlikely that many will plan or save for the future.
However, despite the current financial state of most students, the college years are actually one of the best times to start building wealth. This time in life is often free of many of the expenses (e.g. mortgage payments, utility bills, etc.) that follow after college. As a result, students can use a large portion of their income to save and invest. If you are currently looking for ways to better manage your money as a student, there are numerous tools you can use. Explore five of the top strategies for building wealth while in college.
Use financial apps
There is no shortage of financial apps that can help you manage your money. Whether you are looking to effortlessly invest for the first time, automatically save money, check your current balance, or negotiate your current bills, there truly is an app for everything. As a college student, many financial topics are new and require a bit of learning to get started. Thankfully, app designers are aware of this, and tailor their content toward the younger audience who will be interacting with their content. Most apps have built-in tutorials and educational components that help you make the best decisions with your money. Begin by assessing what you need assistance with (e.g. investing) and download top-rated apps in these areas. Leverage apps as much as possible to effortlessly grow your wealth while in college.
Make work a priority
While it can be tempting to live off of student loan disbursements, credit cards, and money given to you by your family, fight the urge as much as possible. Instead, apply for the best paying part-time position that you can find. Consider working as a nanny, a virtual assistant, or as a transcriber to earn the most money possible. Make it a priority to work through each of your remaining years of college, especially during the summer months. Rather than spending your paychecks, save as much of your earnings as possible.
Be aware of interest paid on loans and credit cards
One little-discussed financial topic among college students is interest paid on loans and credit cards. Even if you have both student loans and a credit card, you may not have taken notice as to what you are paying in interest each month. To help reduce your payments as much as possible, take a few moments to contact your credit card and loan providers to inquire about your current interest rate. If you are paying 18%, 19%, or even 20%+ on any of these debts, now is the time to make some changes. Consolidate your student loan debt on a lower interest loan, and make it a priority to explore 0% interest credit cards. Making these changes now (rather than in the years that follow) can help put $100s or even $1000s back into your pocket. Rather than paying the interest you would have owed, you can save or invest the cash for future expenses.
Find the best savings account
Not all savings accounts are created equally. Just because your family has used the same bank for years doesn’t automatically make it the best choice for you. Explore current return rates online from a variety of banks. Doing a comparison of multiple savings account options will help ensure that you are getting the best return on your deposits. While performing your research, also be sure to learn more about the minimum balance you must maintain, as well as any penalties that can apply.
Assess every purchase you make
College is a time of fun and excitement. As a result, it can also be a time of impulse purchases and excess spending. Before you make any purchase, be sure to assess its true value. Do you really need brand name, or can you buy generic? Can you buy something used rather than new? Do you even need the item you are about to buy? Assess each purchase that you make to help you save as much money as possible.
Post-college life is full of major expenses (including rent, loan payments, and other regular bills). Make life after college much easier on yourself by building wealth now. Using the tools and advice that are available to you can assist you in easily cutting expenses, saving money, and creating prosperity for your future.