Being a college student or a twenty-something, you never have enough money to take care of everything you want. You might be in school receiving a higher education to acquire the tools to land your dream job; however, in the meantime money is tight and student loans are building up.
Read more on getting rid of student loans here…
Especially, if you go to school in NYC like myself (Fordham University at Lincoln Center), there are countless temptations to spend money. However, it is important to realize this is the perfect time to accumulate wealth and make your money work for you instead of mindlessly throwing it away.
This is the only time in your life that your responsibilities are limited. Often in college we are stressed with school work and it feels overwhelming, but imagine in 10 years when you have a family to take care, a full time job, bills, and for many you will still be paying back your student loans. Many people wait too long to start saving or investing their money, and they lose lots of valuable time. So, take advantage of this time and keep your money!
4 Simple Ways To Be Rich In Your Twenties:
It is never too early to start a budget.
A budget is how you divide up your money: how much you save and spend over a period of time. You can have a weekly or a monthly budget depending on your earned income for that period of time, and from there you allocate money to each of your expenses. It is important to leave money for your own personal development and savings.
Look into YNAB or Mint to start budgeting. Or keep an your own excel spreadsheet or have a section for budgeting in your notes on your iPhone.
For me,the importance of budgeting begins with your mindset. You have to get into the practice of spending less money and know why you are limiting your spending. If you don’t fundamentally understand the why, then you won’t keep it up.
Now the left over money from your budget will be your savings. I’ve always been a die-hard saver since I was a little girl (I asked for a piggy bank for Christmas) because it was fun to me. Now I see savings as essential because the money will be there when you really need it. My sister saved majority of her paycheck in college, and she was able to own her first condo at the age of 23.
She blogs about this in her own post “How I Became a Real Estate Mogul at 22“
When I was little, I knew I loved to save my money, but I did not always see exactly what I was saving for. Now, I have money to start paying for my student loans before I graduate. My goal now for my savings is to start paying large chunks of my college loans. T
his might mean less nights out, shopping, or eating out, but I know it will pay off when I finish paying my student loans by 22( my goal). Then I will have the rest of my twenties to live large (well not too large yet, I’m sure I’ll be saving to own an apartment by then).
Besides saving to pay off my loans, I am also investing. After saving for years, and recently reading Rich Dad Poor Dad, I want to stop sitting on my money and invest it. There are many different ways to invest from stocks and bonds to mutual funds and options, and you have to do a little research to figure out what works best for you. I think it is fun to learn about investing, and I am excited to put it to work because why not watch your money grow instead of letting it be stagnant. I am currently using Vanguard, but there are of online investments tools out there.
I am still reading as much as I can on investing, so I can make the most of my money. Think about it if you start investing now in 10 years when you do have a family, you will have money to send your kids to school and travel the world.
“DO I REALLY NEED THAT?”
I love to shop and I do love a little luxury here and there, and I know I am not alone on this. However, I’ve realized those pressures and temptations to have luxurious things are not worth it. So, before you make a pricey purchase; ask yourself: Do I really need that? I want designer bags, but I know it is not worth saving 3 paychecks or going into credit card debt to sport a bag that celebrities who have money get for free. Most likely you do not need to buy that expensive car or watch, and you can save and invest that money.
Take advantage of this time of our lives while we are young and free, and spend your money wisely.
Do not only think about how much money you will have tomorrow or next week, think about how much money you want to have in 5 or 10 years.