Get in the Habit of Saving Now
- Saving money is a life skill that can lead to financial security, independence, and success.
- Setting clear goals, creating a budget, and saving automatically makes saving easier.
- Refinancing high-interest student loan debt could help you save on interest, pay off your debt sooner, and boost your savings balance.
Get a good night’s sleep. Do your homework. Eat healthy. From the time you were young, you learned about the importance of developing good habits. And now that you’re finally on your own in college, you can develop good habits of your own and maybe even break a few of the old ones from time to time (late-night pizza break, anyone?).
There’s one great habit you can develop now that can lead to lifelong success – saving money. Here are some practical tips to help you get started:
- Set clear goals. There are many great reasons to save – to help with college expenses, buy a car after graduation, or even prepare for unexpected expenses. Think about your short and long-term goals and how much money you’ll need to save to realize them.
- Create a budget. To be a successful saver, you need to budget your money. Start by taking inventory of all your expenses to determine how much money you can allocate toward saving. Think about ways to reduce your expenses – like cutting out some monthly subscriptions or spending less money on entertainment. Another way to create room in your budget is to boost your income. Can you get a part-time job or develop a side hustle?
- Be a savings rule follower. Ever heard of the “50/30/20” rule? It says that 50% of your money should be for “essentials” (housing, food, gas), 30% for “wants” (subscriptions, pizza with friends, shoes), and 20% for savings.
- Start small. You don’t need to have a ton of money to save. Saving just a few bucks every week or month can add up over time. Plus, it gets you into the habit of saving money that will pay off big later.
- Pay yourself first. Automatic savings make it easy. Just have money transferred from checking to savings or set up automatic contributions to your 401(k) when you get your first job. When you earn a raise, put the extra money toward your savings.
- Stay the course. The key to building savings is to keep at it even when you have unexpected expenses. Simply readjust your budget accordingly. Don’t get discouraged. We all know things happen so you’ll want to prepare for it.
- Watch and consolidate debt. Debt can really cost you. Make sure you inventory all your debt – from student loans to credit cards – and know the interest rates and the repayment terms. If you can refinance your debt to lower the interest you pay, take advantage of it. For example, you may be able to refinance federal student loan debt with a private loan. Use our calculator to see how much you could save and our refinance guide to learn more about what refinancing involves. If you can save by refinancing, apply that amount to your monthly savings. And when you finally pay off your loans (Yippee!), put the money you used to owe in your savings account each month.
- Reward yourself. When you reach a saving goal, celebrate it. For example, you could go on an affordable trip or buy yourself a not-too-expensive gift. Just don’t let your reward bust that budget you’ve worked so hard to build.
Know where to park your cash. You’ve worked hard to save, so your savings should work hard for you. Instead of keeping your money in a payment app, in a checking account that doesn’t pay interest, or under your lumpy dorm mattress, look into the best savings account options available. Shop around.
Brazos wants to help you save – BIG time!
As a Texas nonprofit, Brazos is committed to helping college students save money with a range of student loans and helpful support to ensure you make the right financial choices, reach your goals, and build the bright future you deserve.