Compelling Motivations to Start Investing While in College

Many students will tell you that their finances in college are often tight. You frequently hear about students being “financially strained” because they’re trying to juggle school and part-time jobs, which don’t usually pay much. As a result, investing isn’t a top priority for most students. However, college is actually a great time to start investing, no matter how much you’re earning. Here’s why:

**FEWER FINANCIAL BURDENS**
Many college students don’t have big financial commitments like marriage or children. Some even get financial help from their parents for tuition. If this sounds like you, you might find yourself with a little extra money, even if it’s just from a part-time job. Investments usually follow a risk-reward principle, meaning the higher the risk, the bigger the potential payoff. While you’re single and without major expenses like a mortgage or child care, you have more freedom and money to explore different investment opportunities.

**INVESTMENTS AS A SAFETY NET**
After college, dealing with large student loans is pretty common. Many graduates spend a big part of their income paying off these debts, sometimes for years. This financial burden can make it tough to buy a home or save for retirement. But if you’ve invested wisely, dealing with loans can be less daunting. Profits from smart investments can help you pay off loans faster. Plus, if any unexpected expenses come up, having a strong investment portfolio can provide some stability, although it shouldn’t replace an emergency fund.

**AUTOMATIC SAVINGS**
A lot of young adults delay saving money until they land a steady job. But you don’t need a big paycheck to start saving. Regular savings, no matter how small, make a difference. Investing can further motivate you to save. Start with small investments to grow your money over time. For instance, if your employer offers a 401K, consider contributing since they might match your input. If that’s not an option, there are other low-risk ways to grow your savings.

**SPENDING MONEY WISELY**
Many students live paycheck to paycheck, and any extra cash often goes to non-essential purchases. It might seem boring to put money into savings when your friends are out having fun, but starting early has its perks. Time is your best ally in investing; the earlier you start, the more your investments can grow, setting the stage for a strong financial future. Investing your leftover money, no matter how small, can make a big difference. Your expenses in college are often smaller than they’ll be after graduation, so take this chance to secure your finances. Take risks, aim for high returns, learn from mistakes, and get used to saving. This will give you an advantage when you’re ready to pay off student loans or buy your first home.

Did you invest any money while in college? If so, what strategies did you use?