Managing your finances during your college years can be as complicated as deciding what to do after college in the real world. For example, if you’re a recent graduate, you may think you want to complete an internship or apprenticeship in another country, or perhaps you want to work full-time in your dream job or continue to graduate school. You can end up doing a 180-degree turn on your career path and choose to take a course in interior design after completing your chemistry bachelor’s degree. Life can be funny like that.
The same goes for your finances. If you’re a college student, you want to take proper care of your money and not end up wasting it on bad habits and illegitimate activities. You want to keep an eye on where your money’s going as well as make wise decisions that can help you instead of break you.
Here are some tips for managing your money as a college student.
Invest part of your income in the stock market.
When you’re a college student, your income may not be as much as you would like. It’s hard to stay wealthy when you’re spending so many hours in school and working a minimum-wage part-time job in retail. However, there are several little ways in which you can grow your finances while you’re a student. For example, one of the best ways involves investing some of your income in the stock market. The stock market is a great way to make your money work for you and generate a passive income while you sleep. You can research your favorite companies and their share price and history to see if it’s a good idea to invest in them.
Another thing you can do is invest in penny stocks. You can research which penny stocks to buy now and invest in them. Be sure to not invest more than you can lose and look out for “fallen angels,“ which are prominent companies whose stock price has been reduced by oppressive market forces. These companies will give you a better return once they return to their normal stock price. Additionally, if this is your first time investing, be careful not to invest in companies that are looking to scam their investors as well as spend too much on a single company—don’t put all your eggs in one basket.
Track your expenses and make a budget.
Moreover, you can make a budget by tracking your expenses as well as your savings. These expenses will include recurring expenses, which are consistent every week or pay period. For example, if you spend $50 on groceries every week, then that’s a recurring expense. You can use free budgeting apps like Mint or PocketGuard to get started.
Open a savings account for emergency funding.
In the case that you don’t already have a savings account, you should definitely open one. A savings account should have some of your money stored for emergencies only. You can open several accounts with a high return interest rate or you can use a low-risk investment account to store your savings as well. Once you calculate your expenses, you can deduct how much money from your paycheck will go into your savings accounts every payday via direct deposit if possible.
Build your credit history with a credit card.
Lastly, you want to start building your credit history so that you can make big decisions like buying a car or a new place once you’re ready. Building your credit will help financial institutions like banks consider you when applying for a loan. Having good credit indicates you’re responsible with your money. A lot of people start building their credit by using a credit card, for example.
The important thing is that you continue striving, succeeding, and learning from your mistakes and mentorship to have better financial results in the future.