When college student’s financial situations are discussed, people are most often talking about huge student loan debts. Only once in my life have I heard this relate to investing. It's just not something that is thought about by average college students, not even much more among my fellow business students. Why is this? I think it's largely due to the huge debt, short-term focus, and lack of money/capital that each college student experiences.
This is not necessarily a bad thing. Investing is really taken too far a lot of times. It’s seen as a way of life when it should be a means to an end. I think that this view that investing is only for a select, financially savvy, few is another reason it is not on college student’s minds.One advantage that college students do have, however, is time. They have extra time to analyze and weigh each risk.
I want to change the way college students think about investing and finance. I remember last year I saw a friend of a friend at a gas station and we began to talk briefly. We exchanged pleasantries and he asked how my recent study abroad experience had gone. I told him of the wonderful new places I had seen and the new friends I had made. Before we parted I encouraged him to travel, his answer really caused me to think for a minute. He said that he was a social work major and on his salary, he probably would never be able to afford it. This interaction has really stayed with me because I think it shows a common mind set. Many people accept the boundaries that are placed on them by others, without considering what they truly want. Now, I’m not saying that everyone must travel and be wealthy because that is simply not possible. However, if that is something that appeals to you then I want to show that there are ways to get there.
So the very first step to investing is just asking yourself, “what do I want”? 90% of our lives are the results of choices that we make. We must decide if these choices will be active or passive. Some will choose each and that’s fine as long as it is in-line with your end-goals. Over my next few posts I hope to show you how simple getting started in investing can be. I don’t claim to be an expert, but I will share what has worked for me. Maybe you will discover that investing isn’t for you but I hope that along the way you can still glean some ways to break from the norm when it comes to financial thinking.
The second thing a college student should do in order to start investing, is create a working budget. Student’s don’t have a lot of money often times, so this makes each dollar more valuable. By learning to manage your money wisely, you will set yourself up for success no matter where you go. I personally use an app called good budget. This is a fantastic app that is simple and easy to use. It functions as an envelope system which just means that you allot a certain amount of money towards whatever categories you spend money in. It is free for up to 12 different envelopes and I have never needed more than this. The most important key for budgeting using this app, or any other, is to BE CONSISTENT. Every penny should be logged for when and where you spend it. The old saying remains true, if you watch your cents your dollars will take care of themselves. For me, budgeting isn’t so much about being a stickler but instead, it shows you how sometimes sporadic purchases can take money away from what you really want.
Keep an eye out for my next article where I will go over some really fun investing apps. Even if they don’t make you a ton of money, they will begin to show you what the process of investing looks like.
