Things You'll Need:
- Goals
- Long term vision
- Discipline
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Step 1
Get a part time job.
Managing money is a lot easier when there is actual money to manage. There are many job options, especially in college towns. Most colleges offer on-campus jobs that can go towards paying your tuition, food plans, or book fees. Another great job for college students is waitressing and other restaurant/fast food positions. Find a job that fits in your schedule and gives you some money to work with. -
Step 2
Set up a savings account.
Now that you have some money to manage, you should look into all the banks in the area. Talk to an accountant who can help you in making an informed decision as to which bank best suites your circumstance. Many banks offer accounts specifically for college students with better benefits and interest rates. -
Step 3
Set up a checking account.
A checking account is a great way to manage your money because it is conveniently accessible and comes directly from your account. You will also be able to use checks and/or a debit card in order to access your money. This means that you have cash backing up every purchase that you make. -
Step 4
Set up an emergency fund.
Life happens, and you need to be financially responsible enough to be prepared for the unexpected. By putting money into an emergency fund, you will be ready when life happens to you. Many people are financially ruined by emergencies and spend years catching up from the set back. These set backs can be easily avoided with the use of an emergency fund. Before you invest any money into savings you should first put a thousand dollars into a money market emergency fund with no penalties and full check writing privileges. -
Step 5
Budget.
First, estimate your total monthly expenses (rent, utilities, insurance, gas, food, etc.). Make sure that these expense are not exceeding you monthly income, and if they are then suck it up and cut some of your unnecessary costs each month. Next, get yourself a pencil and paper and start your budget. Break down your spending into categories and allot an exact dollar amount to each. You should spend every dollar on paper before you make any purchases. This way, you know exactly where your money is going and the left over money can be put into savings, or ice cream. Be sure to stay disciplined. If you budget twenty dollars for clothing each month, do not ever go over twenty dollars. This will be especially difficult when Charlotte Russe has their semi-annual sale and you've been waiting for that shirt to go on clearance... but don't do it! WARNING: This is not an emergency, and should not be taken out of your emergency fund. -
Step 6
Save.
Step six is by far the most exciting and satisfying step of them all. When you understand how far interest can get you, you will be a motivated savor for life! My advice is to include in your budget a category called savings. This has become a foreign idea in our society, but I'm bringing it back. Save fifteen percent of your monthly income to invest in a mutual fund. There are numerous types of mutual funds so you should talk to your bank and shop around for the best place to put your money. The average savings account averages a three percent interest growth while mutual funds average twelve percent over the long hall; that is a lot of interest working for you!
If you invested $500 dollars every month ($6,000 per year) at a twelve percent interest rate from age thirty to age seventy, you will have 5,882,386! Imagine if you started saving now?! You could start at age twenty, stop investing all together at age fifty-five, and retire a multi-millionaire!
