3 Essential Tips For Budgeting In College
When starting a new chapter in your life as big as going to college, I’m sure the last thing you’re thinking about is how to manage finances effectively while there. Well, it’s time to change that mindset and add managing finances to the top of your priorities list.
This is the time to start honing in on practicing good budgeting, saving money, and learning to invest. The sooner you start these three finance habits, the better.
1. Practice Budgeting
Everyone budgets differently because it’s dependent on your income and current expenses. Starting good budgeting habits early will help you immensely after college. Once you become a pro, you’ll wish you knew these budgeting tips earlier.
With college loans, living expenses, and “for fun” funds, it can take some work to set a good budget plan.
Fortunately, there are thousands of budget templates on the internet that can help you organize your monthly or weekly finances. You can print out these free templates and work out your budget by physically writing it down.
This way you’ll get a better idea of how much you’re actually spending and find ways to lower unnecessary expenses. Take advantage of these resources to better your budgeting skills sooner than later.
2. Start Saving
A savings account is a great way to put money aside for those bigger expenses or emergencies that will come up in the future. If you can, put a certain amount of money from each paycheck into your savings account. That way, the money can be out of sight, out of mind, and you won’t be as tempted to spend it.
Saving money early will help you after college when you want to use that money for big investments like buying a home. Viewing what you have saved will be useful when determining how much house you can afford, as this will help shape your budget and ensure you aren’t overspending. With savings built from the beginning of college, you’ll likely be in a good financial position for a larger expense like this.
If you’re looking to gain more interest than a regular savings account, you may want to look into a high-yield savings account. These earn more interest on your money and can help grow your money faster.
3. Learn to Invest
Another useful financial tactic that can help you grow your money while in college is investing. There are many ways to invest your money wisely, whether it be in stocks, real estate, or into a Roth IRA. This way you can grow your money while saving it. Of course, there’s more risk to investing than a savings account. But the possibility that it’ll grow may be worth the risk.
Deciding where to invest your money is dependent on current market conditions. For example, if you’re considering buying a home to use as an investment, it may not be the right time based on the current housing market.
Yes, if you already owned a home prior to the craze of the market you’d be in a great position to sell and make a large profit. But with the amount of money over asking that houses are selling for, it’s less likely you’d make much of a profit if you’re looking to buy only for an investment opportunity.
As for buying stocks, now is the time to invest since the market is low. If you’re looking to invest for your future, the price of the stocks you buy now are more than likely to grow once the market turns around. Do your research and find a few stocks to start your investment journey early.
The sooner in life that you start these three main money managing tools, the better off you’ll be through college and life. So while you are looking at colleges and planning your future, make sure you plan your financial health and future as well.