Whip Your Financial Assets Into Shape with BC SWS 2: Saving

This is a series of articles brought to you by the executive board of the Boston College chapter of Smart Woman Securities (SWS).  SWS is a national investment education organization for undergraduate women.  Through instructive seminars, mentoring initiatives, and meetings with successful investors, SWS provides resources upon which women can build greater knowledge of personal finance topics and the financial markets.  For more information visit us online, follow us on Twitter, or send us an email.

In our first article, we walked you through the process of creating your very own personalized budget.  It probably won’t happen right away, but when you start to see your budget consistently balancing at the end of each month, it means you have a solid handle on your income and expenses.  Congratulations!  Now it’s time for you to take your budget one step further and begin minimizing your cash outflows, so that after all of your expenses are subtracted from your income, you still have some cash left over to contribute to your savings.  In fact, we like to think of savings as a sort of priority expense, kind of like a utility bill we pay to ourselves each month.
 
The power of now.  It might be something small to begin with, like making your own coffee and setting aside the money you would have spent at Dunkin on the way to class instead, but it can add up pretty quickly.  Though you might laugh when your grandma says it, the old adage “a penny saved is a penny earned” is truer than you might think!  The power of compounding interestshows that savings in your 20s can add up to millions of dollars by the time you’re 65.  Obviously the more money you can save the better, but saving even a small amount early on can make a huge difference in retrospect.  Make your 70-year-old self happy and start saving ASAP!
 
But, really- do I need to be thinking about this now?  Sure, it might not be realistic to be planning for retirement when you still have college loans to pay off or the down payment on your first apartment consider, but the glory of saving money is that it’s money you can apply to achieve any of your financial goals.  As you head toward or out into the working world, there are always things you could be saving money for, whether it’s something big like grad school tuition or something small like a new professional wardrobe.  Getting into the habit of consistently setting aside a portion of your income and not living paycheck to paycheck is a life skill that doesn’t have a start date.

Simple ways Collegiettes can save money: 

1.  Know where to spend.
Just because you can save the money you spend on a new sweater or a cup of coffee doesn’t mean you must live frugally until you retire.  Part of saving money is knowing how to spend money wisely, and that means cutting back on unnecessary items and spending money on what matters to you most.  Dying for that new Chanel bag?  Cut back on the money you are tempted to spend on less expensive look-alike handbags that wouldn’t last as long and go for the real thing.  Likewise, if you want to plan a special girls’ night out in Boston for your roommate’s birthday, cut back on Thursday night drinks at Mary Ann’s for a couple of weeks and use what you saved to splurge on girls’ night.
 
2.  Capitalize on your student status.
Being a college student is significantly cheaper than being a real adult, so take advantage of it!  Many shops, eateries, museums, and entertainment venues offer student discounts.  It never hurts to ask if showing your student ID will shave a couple of bucks off your bill.  Saving a little here and there on goods and services you would consume anyway will allow you to hold on to your money by default.
 
3.  When possible, take public transportation or walk.
BC has the advantage of being close to Boston and several key neighborhoods (Cleveland Circle, Commonwealth Ave, Brighton) that are accessible by walking or taking public transportation.  Do you really need to spend $6 each way on a taxi to take you to the Chestnut Hill Mall?  Or can you get to the same stores by taking the T to Newbury?
 
4.  One word: library….
An often over-looked way to get out of purchasing a three-figure textbook that you’ll probably only read half of and are going to return in a couple of months anyway.  Most professors put required textbooks on reserve, and if not, the library probably has a copy on the shelves.  If it’s a textbook for a class and you don’t want to keep it, consider borrowing the book from O’Neill to do your readings or homework.
 
5.  BYOD (bring your own drinks).
Aside from being environmentally friendly, reusable water bottles and mugs can save you a lot of money in the dining halls or off-campus.  Water from the tap is 100% free.  Smart Water is not.  All BC dining halls also have filtered hot water available, so instead of getting your morning chai tea from Hillside for $4, be your own barista.  Bring a tea bag and mug to concoct your own drink.  Not only will it be free, but you’ll also save time and no one will steal your drink!
 
Once you’ve cut back on your spending you can start incorporating saving into your monthly budget and thinking about where you should put your savings in order to maximize the growth potential of your money.  In our next blog installment, we’ll teach you about investing, and how to decide what investment vehicles are best suited to help you meet your financial goals.
 
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