I began working as a student employee during my sophomore year of college. I learned so much that year, but the most important thing I learned was how to save and invest my money. If you are like most Americans, once you get paid it is difficult to save or invest after paying bills. You have to pay your rent or mortgage, utilities, food, clothes, household expenses, and take care of random emergencies (I will talk about how to create an emergency fund later). Typically, emergency expenses include car/ home repairs, hospital visits/medical expenses, unexpected travel, etc. Whatever the emergency, it is still important to make sure you practice saving and investing. Once I graduated, the money I saved was enough to pay for major expenses like rent for a few months.
Whether you are a college student or determined to save and invest, here are a few tips and tricks to help you along the way:
An easy way to save is to pay yourself first. That means each pay period before you are tempted to spend money, commit to putting some in a savings account. Inquire with your bank about arranging to automatically transfer a certain amount of your income from your paycheck or your checking account into your savings account each month.
Track Your Spending
People who keep track of their savings often end up saving more, because they have it on their minds. New phone apps are available to help people pass up purchases they don’t really need – you might want to try one!
Trust But Verify
If you are making investments, its good to consult with a qualified professional about your plans. Before you purchase investments, be sure to build an emergency savings fund to cover your needs for at least three months. Keep your savings in an insured bank or credit union account that you can access if you need it.
Many professionals call themselves “financial planners.” Before you hire one, ask for a description of the services offered. A good place to check the credentials of an investment adviser is your state’s consumer protection office, the state’s attorney general’s office, or the issuing agency for any professional licenses or certifications.