If you are a college student looking to save your ‘limited’ pocket money, kudos!
Having the intention of saving is the first and one of the most vital step that you can take towards your saving journey.
Since we are talking about college-going students, it is important to note that we are assuming students with a limited amount of money and no side-hustle (yet). Sometimes academics do not leave you with ample time to earn while you learn, and we need to be considerate of that situation.
In simple terms, the key is to find balance between how much you spend vs. how much you save, and distinguishing what you want vs. what you need.
So how do we get started?
1. Set a goal
It is important to set a goal. It gives you a concrete path to set your course right. It may be a road trip, substituting for your college tuition, purchase of a prized-possession or anything else. Having a tangible goal in your mind can help you save money in that direction.
2. Set a budget
You can start by following the good old 20-30-50 concept even when you are saving from your pocket money. 20% can go into your savings, 30% on your personal expenses (because you deserve some fun too), and of course the remaining 50% should be allocated to your mandatory expenses. Again, it is important to set the right balance between what you want and what you need.
3. Start simple – open a recurring deposit account
Recurring deposit or RD is a good way to save up your money for short term goals. If you have a savings account (which is mandatory for opening an RD), then you can issue standing instructions where your money will be automatically deducted from the source on a periodic (usually monthly) basis. Do not touch this money until your goal is met.
4. Alternatively, start an SIP
Systematic Investment Planning (SIP) is another easy and reliable way to start your saving journey. With initial investment as low as Rs. 500, it is often feasible for young college students to start saving their money in SIPs. Talk to more experienced folks or GoalFi to understand which market is more suitable for you and investments that can help you gain more rate of interest. To help you get started, check out the Nifty or Sensex fund so that you don’t have to worry about the market performance.
5. Avail student discounts
Even big brandes have a student discount program for their products. But we do not encourage you to indulge in them until and unless you have a burning need. However, we do encourage you to look for and avail student discounts wherever possible! Daily commute, diners and other places have student discounts that help make everyday life a little easier.
Final takeaway
Being a student is not easy. Being a student short on money makes things even harder. However, these are the experiences that you can take forward as learning lessons. On the other hand it is also important to understand that saving does not have to be optional and no matter how much pocket money you get, you can always manage to save a few extra pennies every single day!