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College is the first time that many students will be living away from home and learning how to manage their own money. With the costs of higher education, college may not be the ideal time or place to squirrel away a substantial sum of money. After all, tuition, books and late-night pizza deliveries can really add up.
But that’s not to say it’s impossible to put a little away in your savings account every month to help you reach your financial goals.
Here are three ideas for those trying to save money in college.
1. Open a high-yield savings account. By the time you get to college, you may already have a checking account in place. And if your parents have drilled in the importance of saving money regularly, you may already have a basic savings account too. But now that you’re on your way toward adulthood, it’s time to think about graduating to a high-yield savings account.
A high-yield savings account is a type of savings account in which you can typically earn a higher interest rate than traditional savings accounts. You can open a high-interest savings account at a variety of financial institutions including online banks or at a credit union.
To choose the right account for you and find a competitive rate, it’s a good idea to do a little bit of research and comparison shopping. Here are a few key things you’ll want to consider:
2. Make savings automatic. Hey, every little bit counts. And you don’t have to wait until you’ve hoarded a large chunk of money in your checking account before putting some of that money into savings. Check with your bank to see if your account has an automatic deposits feature. With automatic deposits, you can take a more hands-off approach to saving money.
Automatic deposits basically allow you to schedule recurring deposits to your savings account – you just have to say when and how much. By stashing a little away every month, you can see your savings grow over time thanks to the power of compound interest. Automating your savings also means one less thing for you to think about in school.
3. Bring some clarity to your money. Making a budget may help increase your chances of reaching your savings goals. A budget forces you to take a hard look at your needs and wants. Are there expenses you can reduce or cut to help beef up your savings contributions each month?
Budgeting doesn't have to be a chore. There are plenty of budgeting and money management apps out there that can help track your spending, income and accounts. When you can see how you’re spending money, it can help you create a more realistic budget.
Practicing and building good savings habits now can help set you up for success in the next stage of your life.
There are many websites (maybe too many) that will tell you that saving money and budgeting are easy to do. The truth is: It’s not always so effortless. It takes time, discipline and patience. But you got this!
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This article is for informational purposes only and is not a substitute for individualized professional advice. Articles on this site were commissioned and approved by Marcus by Goldman Sachs® but may not reflect the institutional opinions of Goldman Sachs Group, Inc., Goldman Sachs Bank USA or any of their affiliates, subsidiaries or divisions.
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