Nov 23, 2016 09:29 AM EST
Why College Students Should Start Saving For Retirement Early Even With Limited Resources
It may seem difficult to save money in college when one even has to borrow some from the government to finance one's higher education. However, it is not the amount that matters at this point; it's starting early.
It was previously reported that college freshmen should make sure that they know how to manage their finances well. They ought to find the best account and bank for their current financial situation. They can also keep track of their personal finances with these apps.
There are ways that college students can earn extra money. The traditional route is to work and study at the same time. Professor Laura Perna of the University of Pennsylvania's Graduate School of Education noted that "students who work a modest number of hours per week (10 to 15 hours), on campus, are more likely than other students-even students who do not work at all-to persist and earn degrees."
Another way is to start your own business. Check out these tips on how to launch a successful business and study at the same time.
According to TIME, college students should stop focusing too much on the present (e.g. exams and partying) but think about their future, too. The publication advised that now is the best time to plan for one's retirement; before one even joins the workforce.
It was noted that students should save for retirement as early as college since it would maximize compound interest. Just saving $25 each month to an account with 7 percent interest would earn an individual $59,890.53 after 40 years.
Moreover, there will always be other things that will try to distract you from saving money. It could be textbooks that you need to buy or a nice vacation that you have always wanted to take.
If you start saving early, it would eventually become a habit. This way, as soon as you enter the workforce, it would be easier for you to set aside a part of your income for your retirement nest egg.
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