How to Get Smart About Your Money

I don’t know about you, but money can be a extreme source of stress in my life. I’ve got thousands and thousands of dollars in student loans, my roommates never turn off lights which makes the electric bill soar and my car sucks up gas like a vacuum. Unless you move out to a shack in the Appalachia and survive off of the wilderness, money will always be a constant in our lives, whether we have lots of it or none at all. We might as well change our attitudes, create a healthy relationship with money and figure out how to make more (because who can argue with that?).

1. Fix your attitude towards money

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This might sound a little hippy, but stay with me. If you believe the lie that money is the root of all evil and that it is inherently bad, do you really think your brain is going to want you to have it? The answer is no. Money can create opportunity, open doors and provide necessities to those in need. A positive outlook on money affords for the ability for you to make more and keep more. Remember, money is a renewable resource. You can always find opportunities to make it and spend it.

2. Use a budget

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Give every penny a job. Figure out how much you make each month, put 15% to what you’re saving towards, 10% towards donations and live off of the rest. If you’re still confused, here are TONS of apps and strategies you can use to help you manage your money. My favorites are the Envelope Method, Everydollar, Mint and You Need A Budget.

3. Paying off debt? Decide: snowball or avalanche?

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The goal is to be completely debt-free. No credit card bills, student loans--nothing. But how do you get there? There are two methods.You could list your debts out by amounts and attack the smallest ones as heavily, moving up as you going long--this is called debt snowball. Or you could list them by interest rate and put toward extra money toward the highest one, working down--this is called a debt avalanche. The avalanche is more efficient money wise, but with the snowball, you will see the effects of your hard work quicker. Whatever you choose just depends on the type of person you are.

4. Savings and checking at different banks

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After you finish building your $1,000 emergency fund, move your savings over to a different bank account. If your savings account is at a different bank, it’ll be much harder to transfer money to your checking, i.e. much harder to blow the money you worked so hard to save up on ice cream and Chipotle.

5. Invest

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It’s never too early to start investing! The power of compound interest is amazing, as compound interest is interest that builds on your original principal and the already accrued interest, giving you more money every time your interest is paid. Therefore, the earlier you start, the higher your potential for your money to grow. Figure out how short or long-term the goal for saving this money will be. For something less than a year or so, go the route of a Certificate of Deposit (CD) or Money Market Fund. For investments more long term than a few years, think stocks, bonds and mutual funds. There are also plenty of apps that will invest automatically for you, like Wealthsimple and Acorns.

Whether you’re struggling through school with multiple jobs, or your bank account has never seen less than three digits, I hope you can work smarter, not harder with your money this year. Good luck collegiettes!