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It can be tempting to wait until you’re done with college to start a savings account. Your finances in college are limited, so it can seem like there’s no point in opening an account.
However, having limited funds means it’s even more important to save money and make smart financial decisions. Let’s take a look at why having a student savings account is important and how you can save while in college.
Why Are Student Savings Accounts Important?
Opening a savings account while you’re in college can help you in your current financial situation and in the future after you graduate. Let’s take a closer look at why student savings accounts are so important.
Learn Money Management Skills
Working with credit unions or banks after college is inevitable to maintain healthy finances. Getting started early will help you learn how to work with credit unions and banks.
You’ll also gain essential money management skills such as saving money, writing checks, using an ATM and monitoring your accounts to maintain a healthy financial status. On top of this, you’re learning while you can still take advantage of the student account perks, and it may feel a little less risky now than it would after college.
Gain Perks
Credit unions and banks often offer college students special perks to open an account that aren’t available for people who’ve already graduated. However, the perks associated with student savings accounts can vary between financial institutions, so when you’re researching your options, don’t assume a specific perk is universal for all student savings accounts.
For example, at 7 17 Credit Union, The Edge is a package of accounts and services that builds on real-world money management experiences. Perks include auto loans with no loan application fees, eligibility to apply for scholarships, special discounts and more.
Save Money
The most important reason to open a student savings account is to save money. Many students may not have a job, or they have a low-paying one. While you may not have a lot to contribute at times, you’ll still be able to save some money, which will add up over the months.
It will also help you build up a small emergency fund, which can be helpful if you become sick and need medicine. Getting used to setting aside even a small amount when you can helps you build a savings habit, which is essential for after college when your goal is to build a larger emergency fund with 3-6 months’ worth of expenses.
How To Open a Student Savings Account
Many credit unions and banks waive or reduce the fees for student savings and checking accounts, and may also waive certain restrictions. However, keep in mind that you’ll need to be in college to take advantage of student accounts and their perks. Generally, you’ll need some or all of the following to open an account:
- Valid student photo ID
- School transcript
- College acceptance letter
- Driver’s license or passport
- Social Security number
How To Start Saving in College
Finances in college can be difficult. You’re balancing tuition costs, college fees, room and board, meals, books and entertainment — which can all leave you feeling a little stressed. This is why it’s important to save whenever you can and take advantage of discounts wherever you can. Some top ways you can start saving in college include:
Creating a Budget
To make a budget, create a list of your monthly income sources, such as work-study programs and part-time jobs. Then, make a list of your necessary expenses and subtract it from your income. From this leftover amount, determine how much you can set aside in your student savings account each month.
Buying Used Textbooks
College textbooks can be quite expensive and sometimes cost hundreds of dollars for one book. Buying used textbooks when you can will help you save a lot of money.
You may have to do some extra work to find used versions of the books you need, but it will be worth it if you’re paying significantly less money. The money you save by buying used can then be put into your emergency fund to help build up money for groceries and other necessary expenses.
Using Your College Meal Plan
Is a meal plan built into your room and board? Take advantage of this whenever you can to save money. As an alternative, purchase a few grocery items and cook in your dorm to save money from going out to a restaurant.
Using a Money Management App
Using an app to track your spending will help you see where you’re spending too much on unnecessary expenses and where you can make cuts. Some money management apps may help you create a customized budget and include goal trackers and alerts to help you stay on track.
Build a Stronger Financial Future
It’s never too early to start building a strong financial future, especially when there are plenty of resources available to college students. Explore 7 17 Credit Union’s The Edge financial resources to learn more about what’s available.
