The pressures of academic life often take precedence over the obligation to efficiently manage cash as students begin their educational journey. But creating healthy financial habits early in life is essential for securing the future. It’s never too early to start setting aside money for savings and making sensible financial decisions, whether you’re a high school student getting ready for college or a university student navigating the challenges of higher education.
Particularly if you’re a college or university student, saving money can feel like an improbable endeavor. Where do you put the extra money, even if you can get it together? Only 25% of young Canadians, according to a new Co-operators survey, are confidence in their ability to choose the best financial possibilities.
It’s difficult to know where to begin. But don’t worry; this crash course in producing money will help you pass your classes.
Cover your bases first
Make sure that the money you do have is covering your must-have expenses, such as textbooks, rent, and groceries, before looking for wiggle room (and extra money) in your budget. can include money for some fashionable attire and social outings. You are, after all, a student.
Start early and invest regularly
When your “must haves” are paid for, you’re lucky if you still have money left over. But before you indulge in some good meals to celebrate, think about setting aside money for an emergency fund or paying off any outstanding, high-interest debt. Have any funds left over? You are luckier.
It makes sense to start investing early and frequently in a Registered Education Savings Plan for post-secondary education, a Tax-Free Savings Account for large purchases, or a Registered Retirement Savings Plan for retirement. Due to a concept known as compound interest, even tiny investments can be wise ones.
Here’s how it works: If you start investing at age 20 and make a 5% return on your $2,400 per year for ten years, you’ll have about $175,000 by the time you’re 65. But if you started doing the same thing at age 35, you’d have just under $85,000 in your bank account by the time you were 65. That is the benefit of making investments early.
Consult a financial professional
A conversation with a financial expert can help you get an A+ for your future self. Along with assisting you in keeping your savings intact while in school, you’ll also be better prepared for whatever comes after that, whether it is additional education, a significant trip, or a first house. Your life goals can be identified and prioritized by the expert, who can also advise you on how much money you should set aside to achieve them and keep you on track for success based on your personal priorities.
An easy strategy can frequently help students who are already juggling a lot of obligations and may not have the extra money to save achieve consistent success.
For more further financial planning advice visit https://www.cooperators.ca/ or https://newscanada.com/en/financial-tips-to-help-students-save-for-the-future-136123