When I was in college my friends were in a variety of financial situations. Some were on full scholarships and working almost full time to pay rent and eat. Others financed the entire amount and were pushing off the mounting debt for “future them.” And some were spending their parent’s money, knowing their family was wealthy or connected enough no matter how they did in college.
No matter which one they were, all of them could have benefited from looking closer at their money. When you’re a student and have a low income, every dollar matters more. But if you take control of your spending living on a minimal budget, you’ll feel like a king when you get a full-time job after college. If you live like a college student post-college, you can save up a ton of money while others are spending most of it on new cars and luxury apartments.
One tool I use for this is Mint, a free tool which allows you to track your spending. It’s free to connect to your bank account and other investments, so you can view your net worth (which either motivates you to dig yourself out of a mess or keep building up cash). This allows you to keep track of your finances without signing into multiple accounts.
I was shocked how much money I was frivolously spending because I didn’t measure my finances. Even if you don’t make a ton, you can basically give yourself a raise by auditing your spending and cutting out things you don’t truly value. What isn’t measured isn’t managed. You don’t have to earn a large salary to build wealth because of the huge impact of compound investing if you start while you’re young.
One of the worst things you can do is inflate your lifestyle so much that you’re living paycheck to paycheck, even when you make a good salary. Your income should only rise throughout life, and if you pay yourself first when getting raises, it’ll be a better investment than anything you can buy immediately.
Investing used to worry me because I didn’t understand it. I likened it to gambling at a casino or buying lottery tickets. But the two aren’t comparable. I binge-listened to finance podcasts like Listen Money Matter and Dave Ramsey (which is more focused on being debt-free). And I’ll learn more through mistakes with small amounts of money instead of the amount I’ll be investing when I’m older.
For example, I invested in single stocks before I knew any better. I didn’t lose a substantial amount of money, in that, but I did lose some money investing in Bitcoin. One of my friends lost almost $5,000 in a week, while another friend cashed out at the 48-hour peak, paid off all his college loans, and then dropped out.
All of these people learned lessons before they could make mistakes that could cripple them for life. If you invest in your future by educating yourself, it’ll pay off big in the future.