The magical way to make a little extra cash without having to lift a finger! Here’s the beautiful thing about compound interest: it’s accruing, which means that if you start with $10, and earn 10 cents interest in one month, the next month you will earn interest on $10.10. And it goes on from there.
Upgrading to a non-college apartment
You won’t be a college student forever. That means you might want to start planning for an apartment that is nicer than the ones you lived in during college. Apartments in the “real world” work differently than college apartments where you can just pay month to month. Most require a down payment, and typically it isn’t cheap. In New York, for example, you might have to pay a premium that is thousands of dollars, just to get the place you want. Plus, don’t forget the added expense of moving everything.
Student loans aren't going to pay themselves
Unfortunately, most college students aren’t going to escape the clutches of student loans, which is another reason why you should start saving now. Most loans give you a 6-month grace period, after graduation, before you have to start making payments on them. However, with established savings you could get a jump-start on paying off loans. The less time you spend with loan payments, the happier you will be.
Vacations aren't cheap
No matter how old you are, vacations never get any cheaper. Having savings can help with making a dream vacation a reality. Setting up separate savings accounts, or sub-savings accounts specifically for a vacation can be really beneficial to your savings habits. You can even set up a recurring automatic transfer so that money gets transferred to that account and you don’t have to think about it. Each transfer brings you one step closer to your next adventure.
Expect the unexpected
It goes without saying, you should always be prepared for random expenses. Doctors visits, car repairs, trips to the vet for your new puppy, are all prime examples of random (and costly) expenses that you might not have factored into your monthly budget. If you have a few thousand dollars, or even a few hundred, stashed away in a savings account, it can help cushion the blow of an unexpected bill.
Plan for your future
You may not be planning to have kids in the near future, but they might show up sooner than you thought, and kids aren’t cheap. There is nothing wrong with starting to put money away for the possibility of that future. You could also be planning to purchase a pet of some sort shortly after you graduate, in which case, having a savings is helpful for those trips to the vet, pet store, and even for spoiling them.
Good things come to those who...work hard
The sad reality is that most grads aren’t going to get their dream job fresh out of college. You can’t be a CEO without working your way up the corporate hierarchy first. Furthermore, you might not be making that $100,000 that you “should” be making in your field. You might only be making $27,000 as an entry-level employee. And even then, some college grads spend months looking for a job. Savings can help bridge the gap between school and getting a salary-paying job. But remember, good things come to those who work hard!