Summer is one of the most opportune times for a student to save money. Without school anyone can get a full-time job to get started on their future savings! But how should someone go about saving money?
Firstly, saving money isn’t the same as simply holding onto your money. If you cash out all of your money and hide it under your mattress, you’ll find that due to Inflation, it’s going to be worth less and less. However, there are two great ways to avoid Inflation! Here are some places you can save your money smartly:
One sure way to save your money is in a savings account. Although definitely not the best way to have compound interest on your side, a savings account is a safe place to keep your money while still acquiring a minimum amount of interest. If you don’t like big risks, or just need a safe place to deposit all of your money, a saving’s account will do just that. Most checking and savings accounts are insured. This means that if the bank goes under, then you can still get all of your money back (usually up to $100,000).
*Stocks or mutual funds
Unlike the other options on this list, stocks are a gamble. You are not guaranteed to ever see your money again. Going into this, you must make sure that you have other money set aside (possibly in one of the above options) in case you lose your gamble. However, this is the best way to make money with what you have. When you buy stocks, you are considered an investor. Also, when you’re an investor, you can make profits on what you invest in. Buying the right stocks can lead to great gains in the future. But again, buying single stocks can be incredibly risky. A better way to go about buying stocks is through a mutual fund. This is where you can place your money on a whole assortment of stocks. This allows you to spread the risk of buying stocks. Then again, you might also not gain as much. What stocks you buy and how many you buy is a choice only to be made by you.
However, you may find that you’re having difficulty putting aside money in these places. Where do you get all of this money to save? As a student, you can find many ways to save money in simply spending less. Buying clothes at garage sales, using coupons, doing less impulse buying, and going out less often are all great ways to spend less. Whenever you spend less money, the less you have to work to get that money back!