Whether it be high school or college, students are notoriously known for being “broke.” Money is often hard to come across, and when it is there, it disappears quickly. Unfortunately, this leaves many students often feeling like they don’t make enough money to focus on their financial journey and have little to no clue where to begin.
These five tips will serve as guidelines on how to start taking the steps towards getting ahead financially while you are still in school.
No time to read this now? Pin it for later.
#1 Get A Credit Card with NO annual payment!
Applying and securing a credit card is one of the easiest ways to start building your credit. But, first, you want to make sure it is one without an annual fee. As a student, money is not always consistent, and a yearly fee can set you back if you do not prepare for it.
Using a credit card correctly is also key. Never spend more than you can afford to pay off. This will help you build healthy credit habits and avoid debt. Always pay the card off by the due date to avoid any interest fees. If you end up paying interest every month, that takes money away from other necessities you need.
I recommend Discover Student Credit Cards. Discover will even give you a $20 statement credit for each year your GPA is a 3.0 or higher for five years!
Having credit cards can help build your credit which will be helpful when you are ready to embark on larger purchases.
#2 Start Using Refund Checks and Unexpected Income Wisely
It may be tempting to treat yourself to something you usually would not be able to do with your newfound or unexpected money. Instead, try to do something that will benefit you in the long run instead of temporarily.
Think about what you need that will positively impact other areas of your life, both short and long-term. For example, do you need a car? Using your refund check to save for a car can enable you to become a delivery driver, aiding in another source of income.
Challenge yourself to automatically save at least half of any unexpected money you get, whether it’s a gift, a tip received from work, or that $20 wrinkled bill you found in your pocket.
Always remember that something is better than nothing. If you can only put $2 away, it’s still contributing to a bigger picture and leaving you one step closer to your goal. Building healthy habits of saving while still allowing yourself to enjoy life is grounds for a successful savings account. It will help you get a head start on your financial goals.
For more info on using unexpected income wisely, check out this article.
#3 Establish an emergency fund
Pulling money out of your savings account for unexpected expenses and emergencies will not cut it if you are trying to step your financial game up.
Creating an emergency fund to pay for unexpected expenses and emergencies will help you avoid using credit cards or being in a financial bind when life happens.
The emergency fund should be somewhere where it is not quickly accessible but still can be accessed when you need it.
This fund is one you can build out as fast or slow as you would like. If you can only contribute $5-10 per week, do that. If you can do more, go for it. A good goal to have for a college student is $1,000 tucked away for emergencies.
It will give you peace of mind knowing that if anything comes up, you can tend to the situation with the money stored in your emergency fund.
Want to read more about how to create an emergency fund?
#4 Start Your Investment Portfolio
Investing can be tricky, especially if you are a newbie to the game, but the earlier you start, the better the returns can be, so it is worth it.
I recommend finding a trusted financial company or professional to help you build your investment portfolio. You have the option of investing in stocks, bonds, opening up retirement accounts, and more.
Investments are great ways to make your money work for you. The key is finding which investments are the best choices for the goals you may want to reach in the future.
#5 Make Smarter Lifestyle Choices Where You Can
Examining your daily expenses and figuring out where your money is spent is important to know when you start your finance journey. This reflection can help you see where you can make improvements.
If you subscribe to several different streaming apps, try skimming down to the one or two you watch often.
If you take Uber often, try looking for more ways to incorporate walking into your schedule to save a little bit.
Being mindful of these five ways to get ahead financially even while in school can make a big difference in your daily life. They’ll also give you a head start once you graduate from student status.
Did you find any of these tips helpful? If so, comment below and let us know what you will start doing today as a student to aid in your financial growth?