By: Olivia Coelho
When it comes to adulting, one of the more confusing things to figure out is money. How do you budget your money? What are some basic ways you can understand your personal finances better? While I am still figuring out how to manage my own money, here is a list of some tips that have helped me understand money a little better:
*Quick disclaimer! These are solely recommendations; if some of the tips are not feasible for you for any reason, that’s totally okay! Pick and choose what works best for you :)
Consider opening a Roth IRA
While some of us already have a checking or savings account, I think it is less common to have an account where you invest your money long-term. This is where a Roth IRA account comes in.
For those who don’t know what a Roth IRA account is, it’s a form of a retirement account. A benefit of the account is that you can increase your earnings without the money in the account being taxed.
Many of you might be thinking, isn’t it a little early to plan for retirement? It may be a long time until any of us need to worry about it, but starting an account now means you can get a head start on investing your money. Plus, once you’ve had the account for five or more years, regardless of your age, you could access the money in the account and put it towards a big purchase like a home! As long as you have a job that allows you to earn an income, you qualify for a Roth IRA account.
Figure out how to split your finances and income
Something that helps me when deciding how to spend my money is having a set amount that I want to put into each bank account. Alternatively, I have also split up my income by deciding how much money I want to spend in a given period of time and how much I want to save.
For instance, you could aside 70% of your income towards your longer-term goals and 30% as spending money. Doing this can also help you with budgeting; if you only allow yourself to use a certain amount every week or so for spending, you will be less likely to spend more than you are comfortable with.
This is just an example, but consider creating percentages you feel are reasonable based on your income/current savings.
Set money goals for yourself
Going along with the previous point, create money goals for yourself! Like any goal, make sure it is specific, attainable, and has a set timeline. That way, you can stay on track to complete it.
If you’ve been thinking about taking a vacation with your friends for spring break or saving for an apartment next year, you can set aside a little bit of money every month or week toward that goal. Plus, it’ll motivate you to achieve your goals quicker if you see your savings piling up.
See where you can save (student discounts, sales, etc.)
If you are anything like me, you try to save wherever you can. If that’s the case, keep an eye out for student discounts. Some stores in the area offer discounts in-store if you show your student ID, so take advantage of these when you can.
One app I recommend is UNiDAYS. When you create an account, you get access to discount codes you can use online at places like Aerie, HM, and plenty of other stores!