If you're a college student, you might be asking yourself "how do I build wealth if I don't make much money?" It may seem like a daunting task, but we promise, it's possible to build your savings on a low budget.
We can't reiterate this enough. Budgeting is the key to being financially successful. Understanding where your money is going is vital to building wealth. Sit down at least once a month and do the following:
- Estimate your income for the month: Wages from your job, gifts, scholarships, etc...
- Estimate your fixed expenses: Rent, utilities, car payment, insurance payment, tuition.. (anything that is a reoccurring expense every month).
- Estimate your variable expenses: Eating out, bars, entertainment.. (anything that isn't a reoccurring expense and varies from month to month)
Cut Extra Spending
After you've estimated your 3 major categories we need to do some fiddling. Our biggest category that we can reduce is our variable expenses. Reducing your purchase of movies by switching to Netflix, putting a limit on your bar tab before you go out, and trying to reduce your restaurant trips will all help you reduce your variable expenses and free up more of your money.
Although fixed expenses seem pretty constant, I would suggest shopping around for your internet and insurance. Don't sacrifice coverage or internet speed, but definitely see if you can find a better value in your area.
Make More Cash
It seems like such a pain to ask for a raise, but there are other ways to make more money!
If you're into writing, graphic design, cinematography, music producing, advertising, digital marketing, foreign language, programming, computers, or any other kind of niche hobby, Fiverr is an excellent website to help you earn more money.
You can advertise your skills and people will hire you to do their writing, design, or other project for them. The amount you can make per project can range from $5 all the way up to $250+, depending on your skill level and talent.
Automate Your Savings
When most people try to save money, they fail because they spend it before they get a chance to save it. In order to combat that, I suggest automating your savings.
Many employers allow you to divert some of your paycheck into a separate account. Put a comfortable amount money from your check into your savings immediately so you can't get to it and spend it. Temptation will get the best of you!
If your employer doesn't allow you to do this, I suggest transferring the money into your savings via your bank on the day you get paid. The key is to get the money away from your checking account so you don't have easy access to it.
Regardless of where you're working, or what you're making, it's always possible to save for the future. Saving now will save you a massive headache later when it comes time to retire.
Spend 30 minutes each month going over your money, follow these steps, and follow your plan. You'll be building your wealth in no time if you do!
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