3 Saving and Investment Tips for Students
As a student, you might think that saving and investing is something you don’t have to deal with right now – they would have to wait. But did you know that even a little saving could add up overtime and help you pay for your future investment goals?
The U.S. Office of Investor Education and Advocacy released a guidebook for saving and investing for students and offered the following tips to financial success.
Make a Financial Plan
When making a financial plan, ask yourself this question: What are the things I want to save and invest for?
These could be a future investment plan, a car, an emergency fund, periods of unemployment (especially after graduation), or further education.
Draw a table with columns on a paper. On the left column, list down the things you want to save and invest for. On the right column, write your target period for each goal. Ask yourself: “By when do I want to achieve these things?” Make sure to set your target one item at a time.
Create a Budget
Budgeting is often anonymous with “living within your means”. And this entails being practical in your purchases, managing your expenses wisely, and avoiding credit card or other high interest debt as much as possible.
That bottle of soda you buy every day for $1.79 can add up to $655 in a year. Put that amount in a savings account that earns at least 5 percent yearly, and it would grow to $823.19 after five years, and even grow to a six-digit number or higher after 30 years.
So, if a bottle of soda can make a little of difference, start reviewing your expenses and check where you can save more money.
Start Saving and Investing as Soon as You’ve Paid Off Your Debt
As soon as you have paid off your debts, start building your nest egg and looking for ventures or investment opportunities that will help you earn money.
You can begin with mutual funds. This is a good option if you are not familiar with stock market. Investing firms employ professionals who are trained to investigate companies and recommend those that are likely to succeed. These professionals themselves will choose the bonds and stocks for you.