SmartAsset College SmartStart Personal Finance Scholarship

As a college student, I have received a lot of financial advice from family, friends, and mentors. However, the best piece of advice that I have received is to start budgeting and saving early. This advice has been invaluable to me as I navigate the transition to living on my own, as well as pursue my long-term financial goals. Budgeting and saving early on can be a challenge, especially as a college student. With meals, entertainment, and other expenses that seem important in the moment, it's easy to overspend and lose track of where your money is going. However, by tracking your expenses and identifying areas where you can cut back, you can free up more money to put towards your goals. Creating a budget has not only helped me avoid debt, but also build a solid financial foundation. I have learned valuable money management skills that will benefit me for the rest of my life. For example, I have started using a savings account to set aside money for emergencies and future expenses like buying a car, traveling, or getting an apartment of my own. One of the biggest challenges that I faced when I first started budgeting was figuring out where to begin. I had never been responsible for managing my own money before, and I wasn't sure where to start. However, I found that there are many resources available to help college students get started with budgeting. My university's financial aid office, for example, offers free financial counseling to students, and there are many budgeting apps and tools available online. Once I started budgeting, I quickly realized how much money I was wasting on unnecessary expenses. For example, I was spending a lot of money on coffee and other drinks at cafes and restaurants. By cutting back on these expenses and making my own coffee at home, I was able to save a significant amount of money each week. Another important aspect of budgeting is setting financial goals. As a college student, my goals are relatively modest - I want to save up for a new laptop, for example, or a Summer vacation. However, by setting these goals and tracking my progress, I am able to stay motivated and focused on my long-term financial goals. One of the key benefits of starting to budget and save early is the power of compounding. Compounding refers to the ability of your money to earn interest over time, which in turn earns more interest. By starting to save early, you have more time to take advantage of compounding, which can lead to significant gains over the long term. For example, let's say that you start saving $100 per month at age 20, and you continue to save that amount until age 65. Assuming an average annual return of 7%, you would have more than $250,000 by the time you retire. However, if you wait until age 30 to start saving, you would need to save more than $200 per month to reach the same goal. Of course, not everyone is able to save $100 per month, especially as a college student. However, the key takeaway here is that even small amounts of money can add up over time. By consistently saving, even if it's just a few dollars per week, you can take advantage of compounding and build a strong financial future for yourself. In conclusion, the best financial advice that I have received as a college student is to start budgeting and saving early. By tracking your expenses, identifying areas where you can cut back, and setting financial goals, you can establish good financial habits that will benefit you for the rest of your life. Additionally, starting early gives you the advantage of time, allowing your money to take advantage of compounding and grow significantly over the long term. While it can be challenging to balance expenses and savings as a college student, the benefits of starting early far outweigh the difficulties. Furthermore, by starting to budget and save early, I have gained a greater sense of control over my financial future. I no longer feel like my finances are a mystery or something that I have no control over. Instead, I am actively taking steps to ensure that I am financially secure in the years to come. In addition to the practical benefits of budgeting and saving, there is also a sense of empowerment that comes with taking control of your finances. By establishing good financial habits early on, you can set yourself up for success in other areas of your life as well. For example, if you are able to save money consistently, you may feel more confident taking risks in your career or pursuing other goals that require financial stability. Ultimately, the best financial advice that I can offer to other college students is to start budgeting and saving early. It may not always be easy, but the benefits are well worth the effort. By taking control of your finances and establishing good habits early on, you can set yourself up for a successful and fulfilling life, both financially and personally.