Don't Wait Until After You've Graduated to Start Investing

Many college students don't take the time to think about their finances while they are still in school. This can lead to financial difficulties later on. In this article, read about the reasoning behind investing before graduation, as well as some savings advice. Schools offering Finance Investments & Securities degrees can also be found in these popular choices.

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Why You Should Start Early

For some college students, it can be hard enough to think about making it to graduation, much less about reaching retirement with the right funds. You may be thinking to yourself: 'Why should I start investing now? I have about 40 years before retirement!' But not only is it possible to start investing while you're young, it's also a very good idea to do so. The earlier you start investing, the easier it is to save up the all the money you'll need to live comfortably once you've left the workforce.

First of all, starting now will obviously give you more time to start accumulating retirement funds. If you wait too long to get started, you'll cut down on your amount of time to save, thus making it harder to reach your goals. Another good thing about investing while you're still young is that it gives you the chance to make riskier investments that, in the long run, could end up giving you great returns.

An Investment Option to Consider

According to financial advice magazine Kiplinger, one investment option that might be ideal for students is using a Roth IRA retirement account. Students can choose what types of investments they'd like to make, including bonds, mutual funds, real estate or stocks. Investments can be made based on the risk level students are willing to take. It's just important to remember that only money that's been earned while working can be invested through this type of account, so money your parents give you for your birthday can't be put in it. But the good news is the accounts are tax-free.

If You Don't Invest, Save Somehow

If for whatever reason you decide you're not quite ready to start entering the world of investing, you should at least try to start saving money some way while you're in college, even if it's through a savings account instead. It can be important to have savings, whether it's for your retirement or to give you an extra cushion in case a financial emergency comes up. Money can definitely be tight while you're in college, but every little bit you manage to save will be a good thing in the long-run.

Finding the Money to Save or Invest

College students aren't exactly known for having a ton of extra money at their disposal, so you might be wondering how you're supposed to find the funds you need to invest or save money. Here are a few ideas:

  • If you have a job, ask your employer if you're eligible for a 401K. If you are, you can have even a small amount deducted from your check each week that will go into your 401K account and be used for investments. You could transfer the 401K from one job to another, so don't worry if you think you might want to eventually leave the job.
  • Some banks have programs available where, if you have a checking and savings account with them, they'll automatically transfer money into your savings account. So if you get paid on the 15th of every month, you could have it set up so on the 16th or 17th, ten dollars is taken from your checking account and deposited into your savings. This way the money will be gone before you can even miss it.
  • Round up your debit card purchases. Another option that some banks give to customers who have savings and checking accounts with them is to round up debit card purchases to a dollar amount and transfer the difference into a savings account. For instance, if you buy groceries that total $15.46, the amount will be rounded up to $16 and that extra $.54 will go into your savings account. It may not seem like a lot, but it can add up.
  • Use an old-fashioned piggy bank. At the end of the day, take any extra change in your pocket and put it into a piggy bank, and maybe even try to throw a dollar bill or two in there. Once you get a decent amount in there, you can get it together to use towards investing.
  • Save first, invest second. Once you're able to build up your savings account, you can take some of that money out and use it towards some sort of investing. The sooner you're able to start one, the sooner you'll be able to get going on the other.

Students trying to save up for the future should also be careful when it comes to having credit cards.

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