Saving and Investing / Start Saving

It's the easiest financial work there is. It has exactly three steps:

• Throw money at a savings account.
• Leave it there.
• Repeat.

Easier said than done?

Pay yourself first. It may not seem sensible to save if you're already on a tight budget or have debt. But the point of saving in college isn't to get rich. It's to train yourself to a saving habit. Later, when you have a higher income, you'll automatically put money aside for emergencies, retirement, childrens' needs, a house, cars, vacation.

Can't this wait till after graduation? Unfortunately, life tends to get more expensive, not less. That's why there are so many anxious 40, 50, and 60-somethings a paycheck away from real trouble. Most of them meant to save, but things never quite "settled down" financially the way they hoped. Many are facing retirement with little or no savings.

Do yourself a favor -- start saving now, even if you're only saving a few dollars a month.

Does starting that small work? Ask your favorite rich old person. Most wealthy people got in the saving habit very young, and most started small. But they did it religiously, and as their incomes increased, so did their monthly savings and investments.

Saving step-by-step:

Open a savings account. It takes about fifteen minutes at any downtown bank.

Do not get an ATM card or checks for the account. Your savings account should be the Roach Motel of banking: Money goes in, but it doesn't come out.

Be realistic about how much money you need to live on. You need to buy basic shelter, clothes, food, electricity, water, and heat. If you pretend they cost less than they do, you'll be chronically anxious and in debt, and this will make the saving habit hard to keep. Make a budget and revise it if it turns out to be unrealistic. The budget will also give you a guide to how much money you can save.

If you can't cover your basics, get help at the Consumer Credit Counseling Service on campus at 335-3239. It's free and confidential. You may be overlooking ways to trim your budget. You may be eligible for aid you didn't know about. Or you may need to work more, revise your graduation plan, or take out more loans.

Part with the money. Even if all you can put in is three dollars, do it. Next week or month you'll put in more.

Get a goal. Once you've put money in your account, start setting goals. What do you want to save for? How much will you need?

There are excellent resources on how to budget and keep that wallet in your pocket, and some are listed here. But it still comes down to three steps:

Throw money at a savings account. Leave it there. Repeat.

Other Topics

Start Saving
Interest Made Simple
Investment Basics

Contact Info.

Student Credit & Money Management Services
Iowa Memorial Union
Room 203
Iowa City, IA 52242

319-335-3239

money-management
@uiowa.edu