Saving is a hard concept for a college student to wrap their head around because many times one feels like it is hard to save when you “literally” do not have any money. However, the point is to begin saving. The smallest contributions can pay large dividends in the future. Watch this video regarding the importance of saving: 

The Importance of Saving 

Now that you understand the importance of saving, evaluating the financial institutions that offer savings and checking accounts is important.  Two-minute finance explains the difference between a bank and a credit union.   

Savings accounts are a safe place to save money for your emergency fund. Creating a savings plan can help you develop healthy habits and strategies for future saving. Funds, held in federally insured banking institutions (FDIC), are protected from loss up to $250,000. Savings accounts areTex Money also liquid, allowing for easy withdrawal.  

Setting goals for how much money you want to have in your savings account is key to your financial wellness. Your short-term or emergency savings goals are essential to your financial well-being because they help you to stay out of debt when (not if!) you encounter unexpected expenses, like a replacement laptop or an unplanned trip home. After you have allocated and saved for those expected and unexpected things, save for other key goals like being able to travel to your summer internship, or putting down a deposit on an apartment post-graduation. Here are some other successful saver tips to consider: 

  • Automate your savings. Automatically send a portion of your paycheck to savings. It doesn’t matter if at the beginning it is a small amount like $10 or $20.  The point is to start somewhere and then increase as you can. 
  • Make your savings account not easily accessible. One tip is to not connect your savings and checking accounts. Another good option is to open your savings account at a different bank or credit union than where you have a checking account. Out of sight is out of mind. 
  • Do not touch your savings. Continue to add to it regularly and watch it grow. 

When you are on top of your savings goals, you may want to consider investing in stocks, bonds, or other investment vehicles that have historically accrued higher interest than savings accounts. Even the highest interest earning savings accounts are only marginally higher than the annual inflation rate, meaning that funds in savings accounts will barely gain relative value over time as inflation erodes their gains. Working with a financial advisor, who has been vetted by family members or friends, is a great way to investigate other investing options. If you are interested in additional information about investing, check out this U.S. News & World Report article. 

For additional knowledge regarding saving and saving for your education, check out the America Saves organization. Money