Money-saving tips for college students


Rachel Kamita

Are you financially prepared for your future?

By Rachel Kamita, Staff Writter

When preparing for the grown-up world, after college, there are many things we must do to ready ourselves to have the best possible future. Besides finding a good job and a place to live, if you don’t want to live with your parents, you need to be financially stable. Once you start living on your own you will realize that you need money for basic needs as well as putting some money aside for entertainment and emergency fund.

“Turning our life goals into intelligent financial goals for the future can be daunting at first, but the best decisions we make at a young age,” said Sage Capone, an insurance agent and operations manager of Estate Planning Consultants of Hawaii, Inc.

To get a vision of what your life plan, first write out the financial goals. One may think, “This is not a way to start saving and making money.” But it is! Writing out your goals makes doing them easier because they are tangible reminders of what you are trying to accomplish. It will keep you accountable for achieving the goal that was written down.

When writing out your financial goals, break it down into three categories. There will be the short-term goals, medium-term goals and long-term goals. In short term goals, these will be the goals that are achievable in one year. Then medium term goals are achieved in two to five years and long-term goals are completed in five years or more. After writing it out put your goals somewhere visible and start working toward those plans.

“Personal finance in college taught me ways to make my money work for my investments and most importantly the importance of saving for my retirement now,” said Capone, who graduated from the University of Hawaii in 2012.

A simple way to ease into the process of saving and putting away money is to download an application that allows the user to track their money. An app that was was suggested by Capone was DayCost. This app allows the user to add income and expense logs that help to create budgets for personal categories. This application will help manage your day-to-day income and expenses.

After making your list and working towards goals that were made, move on the the next step opening an IRA. For all who don’t know what an IRA is, it is an individual retirement plan. It is like a savings account that allows the account holder to save money with tax advantages. This means for a traditional IRA, the account holder can put money in every year and then be able to save for retirement-tax free on the growth of their money or on a tax-deferral rate.

If that is what you are interested in doing, go to your local bank, brokerage company or credit union to open an IRS-approved IRA. If you want to be more hands on with what is going on with your money, go for a Roth IRA.

“A Roth IRA is a great option to open at a brokerage account online, helping you manage your account independently with the free research provided by the brokerage account,” said Capone.

The benefit of opening a Roth IRA is that your contributions can grow tax-free and the account holder can generally make withdrawals tax-free and penalty-free, after reaching 59½ years old and the account was open for five years. Some websites that can provide free research to help make intelligent selections in your investments would be Morning Star.

ETF of Exchange Traded Funds have no fees and are great options for students that want to manage their own portfolio. According to Investopida, “An ETF is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. … and ETF trades like a common stock on a stock exchange…. ETFs typically have higher daily liquidity and lower fees than mutual fund shares, making them an attractive alternative for individual investors.”

If you start saving and putting away money in your college years, it will give more time for your money to grow and build up for later when you retire. Yes, that is a long time from now, but just think if you don’t start saving now you will be stressing more about it later when that money is actually needed in retirement. It doesn’t hurt to be over prepared in life.