Challenge Week 1: Discover the Power of Savings
Developing good savings habits early can help you create a financial cushion for emergencies and to meet your long-term savings goals like buying a more reliable car or a down payment for a house. Even putting aside a small amount each month can quickly add up.
To help you visualize the benefits of savings, try out this nifty calculator. Simply:
1.Enter an amount you can afford to save each month
2. Type in the estimated interest rate you expect to receive
3. Plug in the number of years you plan to save
4. Then just hit Calculate!
Post a comment about what you discovered or share your own savings tips with other students right here on One For Your Money and get entered for a chance to win a $25 iTunes card*.
Most financial planners recommend setting aside at least 10 percent of your income to create an emergency fund equal to 3-6 months of your living expenses. This may be difficult for most college students, but here are some suggestions:
- Plan to set aside a small amount from each paycheck, even if it’s just $10.
- Try saving an amount equal to what you usually spend of things that you don’t really need such as coffee or fast food.
- Track your expenses for 1-2 weeks to identify specific expenses you can cut back on.
- Get started on a budget for next semester, including a plan for how you might not have to borrow as much for school.
So start saving now and pave the way to a bright financial future!*Details and official rules here