Savings

Just this year, AARP released a statement that, based off of new medical technology and scientific advancement,  62 percent of children born today will reach the age of 100.

This isn’t our generation. The statistic is for the children born today, but we are only 20 or so years ahead of them. That means it is likely we will also share some of these advantages and in turn, live longer than older generations. So you’re saying, “well that’s neat, but why does this matter to me?”

At 20, most people aren’t thinking about savings or retirement funds, but you need to be. If you will be living longer, that means you either have to continue working past the age of 65 (the common age of retirement), or save up a lot more money.

As a student, there are things you can do now to set yourself up for a brighter and longer lasting future. The first way is to reduce your debt. This could be credit cards, car loans, or even school loans. Now most of these are necessary at some point, but the key is to make sure that you are getting the most bang for your buck.

Credit Cards

When it comes to credit cards, the answer should almost alway be no. Make a budget so that there is no reason for you to need your card. If you can’t afford it, then you shouldn’t have it. But there are situations where credit cards can be helpful if used properly.

Credit cards will work in your advantage if you use them for something that you already have the money for and can pay off at the end of the month. You can use this to attain points (which can be used on the card bill) and to raise your credit score. A better credit score will save you more money than you can imagine. It will forever determine the APR (interest rate) that you get for any loan you take out. So yes, credit cards can be helpful, but more often than not you make purchases that you cannot afford and do not need.

Car Loans

If you do not live within walking distance from school and work, public transportation is always an option to keep you from having to take out a loan for a car. You will pay monthly fee and be able to ride the transit as much as you want all month long. The money you will save on gas and maintenance will grow exponentially. Personally I have found that to rarely work for me due to time constraints. If you also can’t afford to be on the buses schedule then you might have to take out a loan and buy yourself a car. I bought my car at 16 (It’s been paid off for for three years!!) and it has been the best investment I ever made. Make sure you are getting a car that is meant to last. Check reviews online and try to buy cars that are at least a year old to get more for your money. Now is a good time to buy if you’re looking for a newer car because the next years models are coming in quick and shops need to make room. Also, you can’t blame the car for any problems if you aren’t going to take care of it. Drive carefully, keep up the maintenance, and listen to it. Since I have had the same car for so many years, I know when it is acting funny and can take it in before it becomes an expensive problem. So make sure to turn off the radio every once in awhile and let your engine speak to you.

Student Loans

As for student loans, sometimes it’s your only option to afford college. But there are many scholarships that go unclaimed, so take the chance and apply apply apply. Check out both your local community and the world wide web in order to give yourself the best chances. Even getting a couple little scholarships can be helpful– the less you have to take from the bank the better. Remember that it’s not what you take out that drags you down, it’s the interest that compounds until it is paid off so even if they aren’t banging down your door for pavement try and send something when you have extra money.

Savings/Retirement Funds

The second way to save is to pick up a part time job and set that money aside in a savings account. If you just put money aside every time it comes in it will quickly add up and you will gain more and more interest. You can also find out if your job offers a 401K. Some employers will actually match some of the amount you put in which is free money for your future.  If possible put in as much as you can so that you can’t touch it before you turn 65 without being penalized. If your job doesn’t offer a 401K, you can set up your own retirement plans and savings plans, so don’t let that stop you. The more you save now, the better off you’ll be in the future.

Being a student is already overwhelming, but you can’t just focus on the present. You have to look at how the decisions you make now will impact you for the next 50 years. Seeing into the future can be hard work, so when it feels like too much, snag a 20 out of your savings and “Treat yo self”.