Money rules the world. It can’t buy everything, but it certainly can do you some good. Money helps you get the things you like, do the things you love and provide for those you care about. You can do a lot with your money and, if you’re wise, you’ll invest some of it.
Retirement might seem like an issue for later, but consider the cost. Each person’s retirement plan is different, but according to CNBC Money, having roughly 10 times your final salary saved is safe if you want to retire at 67. If you want to retire earlier, you may consider saving earlier.
If that doesn’t scare you enough, consider this: Most Americans get married in their late twenties — women at 27 and men at 29 — buy a house at 32 and have kids at 26.3. These are all large expenses you’ll need large amounts of money to support.
Saving money can be as simple as putting aside a piece of your paycheck for later in your life, but money sitting around doing nothing is money wasted. Instead, it’s wise to invest the money you save and end up with more in the long run.
The majority of college students neglect the importance of saving money at all, much less investing it. According to USA Today, the number of students who even made a budget dropped more than 10 percent between 2012 and 2014. This is a statistic that needs to change, and it starts with investing wisely.
How you should start investing as a student is a different discussion, but the basics are that you can either invest in stocks, which is a stake in a company that hopefully will increase in value, or bonds — essentially loans to the government. Usually bonds are safer than stocks but give you less profit; what percentage you invest in each is dependent on your personal situation. If you want to learn more, Investopedia is a great website to start.
There’s one basic rule to investing and saving, which that is that the earlier you get started, the more you can make. Call it common sense or basic math, it doesn’t matter; investing while you’re young means your money can accumulate longer and in turn means even more money when you’re older. In short, if you start saving and investing now, you won’t have to worry about it later when prospects of retirement seem to be just around the corner.
The real problem arises with how much we make as students; it’s hard to save and invest as a college student when — well, let’s face it — most of us are broke. We do have some options that can help with this.
One of the best options is to get a job or another source of income and start saving. This can be especially effective if your parents already help you with your meal plan and housing costs. A CNN Money report found that about 77 percent of parents plan to help their child pay for college. Necessities you would normally be required to spend on can now be dedicated to saving — if you’re fortunate enough to be in that situation.
You may be thinking that you already have a part-time job and can’t afford to save any money, but take a hard look at your budget, and if you don’t have a budget, consider making one. According to a Biggermarkets report based on a Nationwide Insurance study, three out of four students already work a part time job, but dedicate roughly 40 percent of their budget to “discretionary spending” for activities they enjoy.
College students also face difficulty with time, but because of technological innovations, several companies and organizations have been formed in an attempt to make investing easier.
One company, Robinhood, lets you invest on your phone without charging you any fees. It takes a fair amount of attention, but at least allows you to be familiar with investing. Even more passive than Robinhood is Acorn. Acorn is an app that takes the change from your purchases and invests it automatically. For more long-term users there’s Betterment. The organization uses algorithms to invest for you so that minimal attention is needed.
Lastly, if nothing else, college investing gives you experience. It’s a habit that is good to form, especially as you step into a world where money will become increasingly important to your well-being. Saving and investing are a big part of life; you might as well learn how to do it now.
