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Rent. Groceries. Tuition. Concert tickets.
When you’re a college student it’s hard to predict what your monthly expenses look like. Between textbooks, extracurricular commitments, and part-time jobs, trying to save money can feel stressful-but it doesn’t have to be!
You can stay money-smart following a few tips that will help you practice responsible spending, stick to a budget, add to your savings account every month, and feel good about your financial future.
We’ve teamed up with Bank of America to share everything there is to know about the early stages of saving money—even if you don’t feel like you have much right now.
First off – what is a savings account?
As you might know, a savings account is a place for you to put money to the side safely. But did you know that it can also help boost your holistic financial planning? The money you put in your savings account isn’t just a way to separate your savings from everyday spending money (and help you to plan ahead for the future!), but you’ll earn interest on the money in the account, too, without needing to do anything special.
How do I create a savings account?
Bank of America allows you to easily open a savings account—even if you aren’t already a Bank of America customer. To set one up, you can apply online or drop by a financial center. Bank of America also waves monthly savings account fees for students, giving you more opportunities to build your savings. It’s super fast, super easy, and will be your first step toward putting your future goals into focus.
So – how much money should I actually be saving each month?
Bank of America recently surveyed students and found that 53% wonder how much they should be saving in a month. Of course, it would be awesome if you could put hundreds and hundreds of dollars into your savings account monthly. But the reality is that you don’t have to put huge amounts of money away to build up your savings. Starting now with consistent, small payments-even just $20 per month can go a long way and can help you make saving a habit that will benefit near and long-term goals.
What are some simple ways I can save money?
First things first, you need a budget, and creating one with the 50/30/20 method is super helpful. To break it down: 50% of your after-tax income will cover your needs like rent and groceries, 30% will go to your wants, and then 20% will go into savings.
Another way you can start saving money is to cut back on spending—especially small, frequent and sneaky purchases. Those daily coffees bought before class can add up, and the money will better serve you if it’s redirected toward your savings. With digital tools from Bank of America, you can track your purchases and review statements, allowing you to keep an eye out for recurring charges, and calculate how much you’re spending on things like dining out, and other entertainment. Figure out how these expenses fit into your budget and what changes can be made to save a little more.
Should I create an emergency fund?
If you don’t have an emergency fund yet, now is a great time to create one and start adding to it. Emergency funds differ from your savings, as they’re meant to be untouched until an unexpected event you haven’t budgeted for. Think: car breakdown, medical emergency, etc. Aim to have 3-6 months’ worth of living expenses in the fund by adding small amounts to it every month. If you need to prioritize between an emergency fund and a general savings account, start with the emergency fund. While we can plan out our goals, we never know when an emergency will hit, so it’s best to start preparing now.
Saving doesn’t have to be stressful. Thanks to Bank of America, you have all of the resources you need to get your financial journey started. Learn more here.