Some students feel they don’t have enough to start saving, while the ability to save doesn’t come naturally for others. Either way, students always seem to end the month feeling poorer than they should be.
Ryerson professor Coleen Clark, who has written two university textbooks on personal finance, gives three tips on how to begin saving and actually succeed.
Save a little every week
You might not be able to put away $100 every month, or even $50. But if you have the money to buy coffee every week, chances are you can afford to part with $5 or $10 a week. Put your money into a savings account, and don’t think about it. Ask yourself the question: how much money could you put away and not even miss?
It’s not about the amount you save, says Clark. Rather, it’s about building up the habit of saving. Then, after graduation, beef up your savings account by setting aside portions of paycheques from your first full-time job. A good rule of thumb is 10 per cent.
Don’t wait until you are debt-free to start saving.
After graduating, many say they’re too focused on repaying debt to save money, but savings should never be neglected. It’s not just for a rainy day either.
After seeing your savings grow, Clark said, you’ll start caring more about your money and what happens to it. It’s also good to experience the positive feelings of saving money rather than always connoting money with crushing debt, she says.
Stop thinking about interest.
Clark says when you first start saving, don’t worry about what interest your money is making or how it’s growing. In fact, consider not even looking at your account for a couple of years.
Since you’re a student with little money, chances are interest won’t be anything to write home about. It’s also much easier to keep money in a savings account when you forget it’s even there.
In the end however, there’s nothing more effective than willpower and determination. If it helps, imagine how good it would feel to be debt-free and on top of your money – wouldn’t that be great?