I cannot overstate the importance of saving money for students, it’s the difference between you being able to launch into your life after college, or having to live off of your parents. And if you don’t have any other person you can fall back on? Then you REALLY need to listen up about this.
Gets you into the savings habit early: If you establish a savings habit NOW when your paycheck is super small? You’ll only continue to save more and more money as you get your hands on a real paycheck from a job-job.
Helps you build trust and confidence in your abilities: It’s hard to establish confidence in yourself in your early 20s. You are essentially taking over your life, and you need to know that you can trust yourself in doing so. There are many ways that you can build this trust, but having a buffer in savings? Well, that will go along way to trust that you can handle anything (especially after that first hiccup or emergency happens and you don’t have to call home for help).
Helps you cover increased expenses:Right now, you’re receiving lots of discounts/tips because you are a student. It may not feel like it – especially if student loans are paying for some of those discounts – but you’re living a somewhat sheltered/nurturing life from the outside world. As soon as you graduate? You’re kind of thrust into the rest of society. No more student discounts. No more subsidized housing, and no more parents to help you with your monthly bills.
Lets your money work for you (grow): If you put money into your wallet, it just hangs out there until you spend it. If you put money into a savings account? Woah, Nelly! It actually grows money of its own. This is called compound interest – and it basically means that you earn interest not only on the money you put into the bank but on the interest that your money has earned. It’s a compounding effect.
Gives you options: Imagine if you got the dream job you were waiting for all senior year, about midway through your first year with the job you took in the meantime. How wonderful! But not so much, if you don’t actually have enough money to move there. Or not so much if you don’t have any way to pay for a vehicle (since this dream job is located outside of a city). In other words, you need to keep money in savings just to keep your options open. Even if you don’t know what all your options are right now! Focus and strengthen your finances for when opportunity knocks.
Live life on your terms: If you need to keep borrowing money from others or from your parents whenever you hit a snafu or want to do something…well, they have some sort of say over your life (even if it’s just “yes, you can do that because I’m funding you”). When you save your own money? You get to live life on YOUR terms.
Helps you weather bouts of unemployment: In my 20s, I was laid off twice. Completely unexpectedly. And guess what? My husband was laid off twice as well. That’s four times between the two of us. Yes, you can generally get unemployment insurance if you’re laid off. But it is a fraction of what you typically earn – so you need a savings buffer to pull you through. And when you’re at the beginning of your career? You’re more vulnerable to layoffs.
Lessen your financial stress: This one’s a biggie. You don’t have to go through financial stress – though on some level, we all do (even billionaires!). Cut down on your financial stress by saving money. Seriously – it’s a gift to yourself to not have to worry about where next month’s rent payment is coming from, or how you’re going to get enough food for the week.
Did we miss any point, feel free to drop a comment in the box below.