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High School Seniors, meet Rowdy Cents! (10-Steps about applying to UTSA and getting your money matters in order before you start college!)
home page updated 11/16/09 |
"Stretching your dollars happens one cent at a time," encourages Rowdy Cents.
Benjamin Franklin said “a penny saved is a penny earned.” Since he wrote that in the 1700's, the value of a penny has changed due to taxes. It actually takes earning a bit more before 1 cent is saved, depending upon one's tax bracket of course.
Before the recent financial recession, there were very few Americans concerned with saving even one cent. Surveys reported that less than 7 percent of the adult population actually had any savings at all. Building financial wealth and long-term security depends upon saving money and eliminating debt.
As a college student it is difficult to even think about saving money for "a rainy day" when you have so little money anyway. Consider this, the habit of saving money, even if it's just $20 a month, is as valuable as the $20 itself. If you don't start now, it will be just as difficult when you start, if you start, later. Save a little now and you'll be able to save a lot later. Here are some things to save for:
- Living expenses the last month of the semester -This sounds really silly but it happens that students receiving financial aid living expenses at the beginning of the semester often run out by mid-term.
- Gas expenses for the next trip home (even if you carpool - share the costs)
- Purchase a laptop or some other equipment needed for classes
- An emergency trip to the doctor
- A holiday or spring break trip
It all starts with taking control of your expenses, budgeting, and making a commitment to save. Then it takes action to
Save for emergencies - that proverbial "rainy day" when the job is lost or the house AC doesn't cool anymore in the 100 degree heat or the car's repairs cost more than the car is worth
How much? Experts advise an amount = 3 month's income
A college student may want to set aside an amount = 10% of estimated living expenses.
Save for financial goals - like the ones you wrote down on Rowdy Cent's worksheet:)
How much? Experts advise an amount equal to 10% of gross monthly income, at the very least, should be saved every month. Be sure to prioritize financial goals.
A college student would have shorter term financial goals - maybe just looking to one semester ahead.
Save for retirement - it should be a financial goal on your worksheet.
How much? Experts say the goal should be 70% of one's pre-retirement earnings to comfortably maintain one's standard of living during retirement. Getting started saving early could make a few hundred thousand dollars difference at retirement.
Most college students can't even begin to think of this because it's so far in the future. But honestly, you can accumulate a lot of money through compound interest. Even as little as $20 a month x 40 years at 5% interest average can get you $20,962. (Use a financial calculator to play with this.)
Save for special things - vacations, charity gifts, a house, etc. - put these on your financial goals worksheet!
A college student's list may include items like an iPod, laptop computer, a Kindle, a spring break trip, etc.
LOOK!
JOIN!
America Saves -an organization devoted to helping Americans with savings strategies; great tips from their enewsletter, such as
"Savings Strategies: Coping with Consumer Debt"
Rowdy agrees with his friend Ben who said, " An investment in knowledge always pays the best interest."
PAGE UPDATED 11/16/09
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