Any student you talk to will tell you that college isn’t exactly the most affluent time in one’s life.
After all, how many times have you heard the phrase, “I’m a poor college student”?
Most young people are focused on passing their classes and surviving exams, and while this isn’t true for everyone, most students only work part-time jobs in order to juggle everything, which doesn’t exactly equal a big income.
At the end of the day, investing is probably the last thing on every students’ mind.
Plus, most students probably don’t feel as though they have adequate financial knowledge or enough money to do so.
On the contrary, college is one of the greatest times to invest, no matter your income.
Here are some reasons you should invest while you’re still in college.
You Have Less Financial Responsibility
The majority of college students are typically unmarried and don’t have kids. Some even receive financial assistance from their parents when it comes to tuition.
If this is this case for you, then you most likely have surplus income, even if it is just from a part-time job.
A general rule of thumb in the investment world is the bigger the risk, the higher the reward. If you decide to invest in riskier stocks, and you’ve done your homework, chances are you’ll receive great financial rewards.
However, when you’re married or have kids, the risk that those big returns come with might not always be a good idea. When you’re single, you don’t have things like a mortgage and child expenses to worry about, which means you have more disposable income to work with. This gives you a great opportunity to explore your options and investment opportunities.
Invested Money can be a Great Cushion
Most students exiting college find themselves facing a great amount of student loan debt. Unfortunately, for a year after school, if not more, the majority of a graduate’s paycheck is dedicated to paying this debt off. Even worse are the students who end up with even more debt trying to pay their debt off in the first place.
It’s no wonder young people aren’t able to purchase houses or save for a retirement fund when all their cash goes towards loans.
However, if you already have a good amount of money invested and set aside, those loans and debt don’t have to seem so daunting. By investing in the market and making money, you’ll give yourself the ability to pay off your loans at quicker rate.
Furthermore, should you run into an emergency, you can rest easy knowing you’re financially secure with the money made off of your investments. (However, this should not replace your emergency fund, since some investment accounts aren’t as liquid.)It might sound counterintuitive, but being a student in college is one of the best times to invest Click To Tweet
You Have No Choice but to Save
Many young people don’t even consider saving until they have a steady, salary-paying job. However, you don’t have to have earn serious cash to save.
Saving at any period in your life can be financially beneficial, even if you’re only able to save a small amount. You’d be surprised how quickly small amounts add up.
Investing can help you learn how to save. Start small with your investments and choose something to invest in that is guaranteed to make your money grow.
For example, if you’re working, most companies offer the option to invest in a 401K where they’ll likely match the amount you invest. If your company doesn’t offer this, there are still tons of low-risk options available that’ll allow your money to grow.
Today’s job market can be tough, but knowing that you have money stored away can give you peace of mind. Unless you already have something lined up, most college grads spend months job hunting; having extra income in your back pocket can make the push to find a job less stressful.
If you have a job, saving with your investments can be a great head start to items you might want in the future, like a house, car or your retirement fund. Whatever your money goes towards, saving is always financially beneficial; investments can help ensure you always have a positive number in that area.
Could Your Money Be Going Somewhere Better?
For many college students, living paycheck to paycheck is the norm. If they have disposable income, it’s usually spent on wants, whether that’s out at a bar, ordering take-out or buying items they just have to have.
When you’re young and all of your friends are having fun, the idea of opting out of certain activities and putting money away seems absolutely dreadful. You have your whole life to save and invest, right? While that may be true, why not get ahead of the game?
When it comes to investments, time is your best friend. The sooner you start, the larger your investment can grow and the better off you’ll be for the future. It may not seem like it now, but you won’t lose anything from staying in a couple of nights or waiting to ask for that item for your birthday or Christmas.
Value the surplus of income you have when you’re single and put it towards something better. Think of it this way, would you rather spend $40 at Target now on things you’ll eventually toss, or invest that money so that it grows to be $100 or more?
Sometimes, when you have disposable income, but it doesn’t equate to a large amount, it might seem pointless to invest it. However, you’d be surprised how quickly that small amount can grow with the right investment.
When you’re single and in college, your responsibilities and expenses aren’t quite as large as they are once you graduate. Take advantage of this time and use it to your financial benefit. Take some risks, earn great returns, learn from mistakes, and learn to save. You’ll thank yourself the day you pay off your student loans or buy your first house ahead of your peers.
Did you invest money while you were still in college? If so, how did you find the right investments?