Saving money while you are in college can be overwhelming. Many other things are vying for your money’s attention, such as tuition, textbooks, and groceries. However, prioritizing saving now, even if it is only a small amount, will benefit you in the long run!

Financial Security:

If 2020 has taught us anything, it is that nobody can predict what the future will hold. By creating an emergency fund, you will be able to react when unexpected situations arise. Having a backup fund will decrease your financial stress and give you more options when you find yourself in unfortunate circumstances.

Financial Freedom

Do you want to travel the globe once you graduate? Maybe you want to invest in a nice car or home someday? Contrary to popular belief, saving and fun are not mutually exclusive. You can begin saving now for your future endeavors. It takes work to earn money, and it’s okay to enjoy it.

Developing Lifelong Habits

Have you ever heard the saying “It takes 21 days to form a habit?” If you start saving now, it will eventually become second nature. Practice managing your money now so that when you start receiving that steady income after graduation, you will have experience allocating it.

Interest

Let’s discuss the magic of compound interest. Compound interest increases the value of your initial investment. For example, if you were to deposit a total of $5,000 into a savings account with an annual interest of 5% compounded monthly, the balance of the investment after ten years would be roughly $8,000. Compound interest can be extremely beneficial, but it takes time to see the results. You should begin saving early if you want the time value of money on your side.   

As a college student, it can be easy to put saving on the back burner while you focus on other expenses. It may seem like it is not worth it to put what little money you have left over into savings. Do not be discouraged, because every little bit that you can put toward your savings goals now will only help you in the future.

Resources:

“What Every College Student Should Know About Savings” https://www.discover.com/online-banking/banking-topics/what-every-college-student-should-know-about-saving/. Accessed on 15 October 2020.

Hoyt, Elizabeth. “Money Saving Advice for College Students.” Fastweb.com 21 August 2019. https://www.fastweb.com/financial-aid/articles/money-saving-advice-for-college-students. Accessed on 15, October 2020.

“The Importance of Saving Money: 15 Reasons to Start Saving.” https://bethebudget.com/the-importance-of-saving-money/. Accessed 15 October 2020.