student – Minerva Money

As as a current student in college, I know how difficult it can be to keep track of your finances. With so many social events and educational materials that need to be paid for, it can at times feel like we are spending money as soon as we earn it. Now is one of the most crucial times when it comes to building the structure of our lives. As college students, we must put everything that we have into bettering ourselves for our future, after all, it's right around the corner. Because of this, practicing good financial habits NOW allows you to not only use your money to get you through college, but also enables you to set some aside for more important use later in life when it really matters. Why wait until it's too late and you find yourself in a strained monetary position? Take control TODAY and implement these tips which I have used in my own college experience to help better control your financial situation and focus more on the important things, like the structure for the rest of your life. Why You Should Save Money in College The point of me creating this segment is not to sit here and reiterate the blatantly obvious. We know that it is important to save and that it helps us tremendously when it comes to expenditures later in life, not to mention DRAMATICALLY helps take off financial stress. Why I really want to write this is to allow you to realize the urgency in starting your saving journey TODAY. It is absolutely essential that you take this time now to save so early on in life. The fact that you will have begun saving at such an early stage will enable you to unlock new financial options later on that may not be available to the typical person. All because you practiced two main concepts: Low Overhead Low overhead is the notion that we only buy what is necessary. It is a minimalistic view that allows us to actually get ahead early on in life. You see, when most people start making more money, more expenditures start to come into play. It is a common rule for life. The more you make, the more you spend. What low overhead attempts to do is prevent such spending. This means that when we do actually have the means to buy something that is essential to living, we don't go overboard. Instead, we buy the car that is mediocre and allows us to set aside the rest of our money towards something that is more impactful in our lives. Of course, this becomes a question of the ego and whether or not you can overcome it in the instance of your purchase. If you do however, you will have fruitful rewards later on, should you allocate that money correctly. Which leads me to my next point. 2. Compound Interest Compound interest is one of the greatest financial superpowers that we as college students have access to. I cannot stress this enough, we are at a point in our lives that allows us to make some SERIOUS returns in the long-run if we utilize this concept. To keep things simple, Compound interest is the ability to earn interest on your interest while you are investing. It basically involves taking your dividends earned on your investments and then adding it to your principle, this in turn increases your current standing and allows you to earn interest on that increased principle. But why is compound interest so important for college students specifically? In the history of our financial markets in the United States, the stock market has had an average return of anywhere from 8-10% over 10 year periods for the last 100 or so years. This means that if you were to invest an initial payment of $100 and then an additional contribution of $200 per month, you will enjoy a balance of $40,232.15 at the end of those 10 years. This is not only extremely do-able, but it is also realistic. With the combination of low overhead and compound interest, you too will be able to enjoy these impressive returns. Realizing the importance of these two concepts, there are multiple things you can implement into your life today that will enable you to set money aside for your future. Here are some examples of things I've used in my own life to enable me to improve my monetary situation in college. 6 Ways to Save Your Money in College 1. Put Aside One-Tenth of What You Earn The notion of setting aside one-tenth of everything that you earn dates as far back as the biblical times. It was a way to tithe and give back to others in life, not to mention it was a strategy for increasing wealth. This concept is reiterated in George S. Clason's The Richest Man In Babylon, one of the greatest personal finance books of all time. What Clason describes is that by setting aside a tenth of what we earn, we enable ourselves to have capital to use on investments and business endeavors when the opportunities arise. Initially, a tenth doesn't seem like all that much, but over time, your money that you set aside will have grown into a substantial sum of money. This money can not only be used to place into the stock market and enjoy compound interest, but also take part in other ideas you may have in building wealth. The options are really endless, all Clason recommends is that when you do decide to use that money, that you trust it with someone knowledgeable in that field. 2. Avoid Useless Expenditures This is a common theme with students in college. We are just now finding out how to allocate our money correctly, so we may unintentionally place it in places that are actually harming our finances instead of helping them. In the short-run, it may seem obsolete paying 5$ for a coffee or $10 for a subscription service that we don't even really use. There are so many things in life that we can consider cutting out that are just hinderances to growing wealth. Some examples of expenditures that can be eliminated are... CoffeeFast FoodNetflix, Hulu, Disney+ SubscriptionsExpensive ClothesCigarettes/Vape PodsBuying Too Many Drinks A lot of people would argue that some of these things are necessities in their lives that they can't live without. If this is true, is there another way that you could make these expenditures cheaper? Maybe consider getting coffee twice a week instead of four. These little adjustments are crucial when it comes to saving your money long-term. 3. Create a Strict Budget Budgeting is one of the greatest ways that you can allocate your money correctly as a college student. With so many expenses that college students are faced with, dedicating your money to designated parts of your life is CRITICAL from an organizational standpoint. The way I look at it, is that a budget should not be overly complex. Instead, it should be simple and easy to follow, or else one might not even follow the budget at all. Budgets should also be created in a way that allows you to give yourself leeway in the areas that are needed. Once a budget is created it should be CONCRETE and unadjusted, mainly to hold yourself accountable for the foreseeable future. The budget that I use is simple and allows me to avoid overcomplicating things. You are welcome to use the same budget allocation or change it as you see fit, as I realize everyone has different situations in life. Here is the exact percentages I use for my own budget: 25% Play Money (social events, eating out, personal purchases)55% Real World Payments (car payment, house payment, gas)10% Investing (stock market, business endeavor)10% Tithe (local church, organizational cause) 4. Buy Groceries Instead of Eating Out Out of all the tips on this list, this is one of the easiest ways that you can free up more of your money. Meal prepping at the beginning of the week is not only a healthier alternative, but it is also cheaper in the long-run. On an average visit to the grocery store, one might expect to spend anywhere from $50-$100 depending on the types of food you are buying and how many people you are purchasing for. This usually lasts the consumer anywhere from one to two weeks if the food is purchased in a strategic way. On the flip side, going to a local fast food or sit-down restaurant will on average cost around $10, and that's being generous. If you go out and eat five meals during the week, you have already reached what you could have spent at the grocery store to last you way longer. Meal-prepping is a great way to prevent the urge to need to go out and eat, especially if you have a time restraint. Consider trying this for two weeks and I guarantee you will find more money in your pocket. 5. Reduce Monthly Payments While useless expenditures might be able to be avoided, monthly payments on larger payments are a little harder to evade. House, car, and education fees are all things that many Americans have to take on in today's average life. Because of that, it is crucial that we figure out how to deal with those payments in the most effective way possible. This all resorts back to the low overhead concept that I discussed earlier in this post. When we begin to make more money, we should attempt to buy only the things that we need, not the most flashiest purchase that will make us look cool socially. Sure you might get attention from others in the current moment, but for how long? We're after REAL wealth here. The kind of wealth that will last for generations after you. The kind of wealth that allows you to live comfortably, no matter the status of the market. You can't do that living the most flashiest lifestyle possible early on. Instead, consider being reserved and humble during your first couple years of prosperity. Your money will go so much further in the long-run. 6. Make Saved Money Work For you Once you have used the tips above to begin saving money, it's time to implement systems in your life which allow your saved money to increase your capital. The overall goal of most people's accumulation of wealth is to acquire true freedom. It's to gain the ability to do what they really desire in life without feeling like a slave to their finances. Making your money work for you is a great way to begin getting out of this "Rat Race" as financial guru Robert Kiyosaki calls it. Making your money work for you is possible at any stage in your financial journey. Whether you have lots of money to invest in a house that pays you rent every month, or a tiny bit of money that you invest in the stock market to gain dividends, there is always a way. Some specific ways that I have allowed my money to work for me during my college years is through... Building a cryptocurrency mining rigInvesting in the stock marketAcquiring assets which grow in value over time (trading cards, GPUs) These are just a tiny fraction of the possibilities that you can pursue in your own journey to financial freedom. Just like I said in the first tip, make sure to only trust your capital with someone knowledgeable in the field you're allocating your money to. This is just another precaution when it comes to making sure you don't lost your hard earned income! As you can see, there are many ways that you can begins saving while you are in college. Begin implementing these tips now so that you can focus on the things that really matter during this time, building the foundational structure for the rest of your life. To Summarize: 6 Ways to Save Your Money as a Student Include: Put Aside One-Tenth of What You EarnAvoid Useless ExpendituresCreate a Strict BudgetBuy Groceries Instead of Eating Out Reduce Monthly PaymentsMake Saved Money Work for You If you have any questions about the topics above or any more suggestions, don't hesitate to leave a comment, I'm always eager to engage with you, the reader!