Photo by Sophia Daugherty Munoz
BY MAYA MEADE, BLOGGER
One of the biggest stressors that college students face is making their way through school without spending all their money. This blog post explains four ways I have been able to manage my finances and save money while feeling financially secure for the future.
When you start making money, start saving it
As soon as you start your first job in your college career, try to save a portion of every paycheck. Usually a good rule of thumb is 30:70; 30% of each paycheck should go into savings and 70% should go into a checking account. These percentages can fluctuate depending on your weekly and monthly expenses, but keeping track of what is going in and out of your account is important. It is also important to consider having a savings account where you can’t easily take money out after putting it in.
Start building credit at a young age
If you already have a checking account and are using a debit card, then owning a credit card is just as easy. Never spend more than what you have in your checking account. If you follow these rules then you won’t end up with any credit card debt, and you will slowly build credit for when you need to make bigger purchases later on. Many credit cards offer rewards programs for students that debit cards don’t have.
Open a Roth IRA when you’re 18 years old
If you invest $30 a month into a Roth IRA retirement plan from the time that you are 18 years old, you can retire with one million dollars. I started my Roth IRA when I was 18 years and ten months old, so I invest $35 a month instead. I will be behind for about six years, but after that I will be ahead and retire with more than I had originally planned. You do not need to pay a financial advisor to do this for you. Merrill-Edge is a great website with a variety of options and explanations of all things finance for the best choice for you.
Track your Spending
There are many ways to track your spending. Some people prefer budget planners while others prefer balancing their checkbook. I tried a budget planner but it was too hard to write down everything I spent. I tried saving my receipts and putting them in an expanding folder that organized them into separate months. That was also too much work for me. I decided to get the app Mint on my phone. I use the FifthThird Mobile banking app and the Discover banking app, which both connect to Mint. Mint tracks how much I spend, how much credit card debt I have, tells me when my credit card bills are due and tells me my credit score. You can also set goals on the app for how much you want to save or spend in certain categories of life and it tells you if you have exceeded or met those goals.