Tips & Tricks on Money Making & Saving for College Students
In January 2020, the GameStop stock wars took the Internet and then the pop culture world by storm. It was a pretty exciting ride and many people, including many teens and college students, made a lot of bank if they got in early. But if you weren’t one of those people, don’t worry about missing out. Stocks, like a lot of investments, are a risky bet, and just as many lost money as made money during the retail frenzy that followed the GameStop boom.
Thus, perhaps the most important lesson here is opening oneself to the opportunities available. To looking beyond whatever you have been currently doing with your money and realizing that there are better ways to save, better ways to invest, better ways to spend; you just have to learn about them. The following is a look at some of our favorite money-making and money-saving tips that won’t make you rich overnight but will put you on the road to an overall more secure financial future.
1. Create a Budget and Start Tracking Your Money
We’ve written in specifics about budgeting and good budgeting apps to use previously, so this is just a quick synopsis. Before you can invest your money, you need to know what you have to work with — and the only way to do that is through budgeting. If you spend more than you’re bringing in, then you’re just going to put yourself in a bad hole where the interest rates on things like credit cards will cost you more than you’ll make elsewhere. You want to avoid living on a credit card or any other type of means as much as possible and the best way to do that is by budgeting.
A simple budget will list out all of the money you have coming in and out each month. Money coming in includes money from your job, any fellowship or student grants, and any extra cash relatives are giving for basic needs. Next, write out all of your expenses. Guess mark where you don’t know (such as $100 on restaurant food) and then track over the next month to get accurate numbers. Don’t start investing until you have an accurate accounting of all your expenses.
Finally, take your income, subtract your spending and whatever you have leftover is money that you can use for the next steps of saving and investing.
2. Start Simple With Stocks
First off, do not go crazy and put everything you have in stocks. Always invest only what you are willing to lose. That said, starting smart with just a hundred or couple of hundred dollars can reap you thousands in return if you are diligent about what you invest in, when you invest, and when you take out.
The good news is that trading stocks have never been easier thanks to zero commission applications like Robinhood and WeBull that enable you to do trades at no cost. This is key as it used to be you’d have to pay $5 or $10 on every trade and, for the retail trader starting with only $100, that essentially eats one’s potential profits right out the gate.
The other good news is that as a young adult, you have a good grasp on what things are popular among your peers. This is important as the hardest thing about investing in stocks is knowing which ones are good, which ones will take off. You can subscribe to smart newsletters like Motley Fool for starting advice and to learn about perennial solid picks, but also keep in mind what you see around you. What trends are good and what types of technology are likely going to be on the rise. Start with $100 and try and add $10 every month to your stock portfolio. Do not go fancy and buy stocks or funds on margins (at last not until you have a significantly better understanding of these terms and the market) and always, always only invest what you can afford to lose.
3. Check Out Crowdfunding
No, not the GoFundMe type of crowdfunding. When someone is talking about investing in crowdfunding, what they are talking about is equity crowdfunding through companies like Groundfloor and Fundrise. Groundfloor is an especially good choice to start with as investors can get started with as low as just $10. This makes it easy for you to test your feet in equity crowdfunding to see if you like it or not without having to risk a sizeable amount of cash.
How equity crowdfunding works is that when you invest your cash, you are getting in return an equity stake in whatever the company invests in. With Groundfloor, that is real estate. You became essentially a small-time lender and so as that loan is paid back by whoever Groundfloor invested in, you get paid back. Groundfloor in specific has been able to secure its investors a consistent average of 10% returns over the past six years, with its repaments occurring every six to nine months. That’s a dollar for every ten dollars you invest.
Always Do Your Due Dilligence & Exercise Caution
Remember, when it comes to investing, nothing is a sure thing. So while we hope this article offers some good starting advice, remember to always do your due diligence and, again, never invest more than you can afford. That said, smart investments can bring in some comfy returns. And comfy returns can equate to comfy lifestyle upgrades. Like a new couch for your Junction Cottages & Townhomes apartment? And if you need help finding a moving company for that new couch, never forget our team is here to help!