Ways you can Save Money in College

Just as every other college is different, every student is different. The only common experience for most students is the constant shortage of finances during their college years. Care packages from home are less frequent and it seems like every other time you confirm your account the balance gets smaller at a very high rate. To avoid insufficient money to spend when in college, you should learn how to budget and save the little you have to stay away from hefty debts.

Finances become an issue, especially if you do not have any experience in budgeting and saving. Keep in mind that money does not grow on trees and things do not get any cheaper therefore manage your cash well. Below we will look at some ways on how to save money in college:

Learn to Save Everyday and Remain Cool

Life on campus comes with many temptations for the naive student. You can blow through your spending without even realizing how fast it is going on a number of ways. Nevertheless, there are many ways to save your money while in the campus without denying yourself the adventures and fun moments that college has to offer.

Food Expenses

Meals are a big offender because they can put a huge dent on your funds in college. Certainly, you will have to eat, but if you cultivate a little discipline on your food budget, then you can save large sums of money. In this case, consider the following tips which will help you manage your food expenses when in college.

  1. Come up with a weekly food budget that you will stick to the whole week.
  2. Take college meals if you have paid for them instead of purchasing more food.
  3. Completely cut off unnecessary restaurant spending habits. This can seriously compromise your food budget.
  4. Avoid taking alcoholic drinks in bars and restaurants. The cost of night outs will strain you financially and this will cause serious implications on your overall budget. Otherwise, make sure you allot a sufficient amount of funds for this category in your weekly food budget.
  5. Eliminate daily smoothies, coffee drinks, and other treats. These treats are costly and a regular habit could add up quite fast therefore taking a very large chunk of your funds. Alternatively, you can buy a cheap blender or coffee maker and make your own drinks since it is a cheaper option.

Food is an essential requirement, but with some little budgeting and planning, it is possible for you to save a lot of money. As you are strict with your studies, be as strict with your food spending and you will avoid writing home for emergency funds.

Smart Saves on College Expenses

Necessities take up quite a large fraction of your fund. Tuition, fees, books, furniture, clothing, lab fees add up fast, thus leaving you with a small amount of cash to spend on entertainment and food. While these costs cannot be avoided, we have better ways to manage them and eventually save some money. The following tips will be of help:

  1. Buy used textbooks when possible. The cost of textbooks can be despicable, but used books can even cost half the prices of new ones. By so doing, you could stretch your funds a little more.
  2. Set up a college savings plan and make the most out of the funds you save.
  3. Pursue scholarships if possible, even beyond your first college year. Grants and scholarships help a great deal in reducing the overall cost of your college education. Also, in addition to applying for traditional scholarships, checking out weird scholarships might offer easier wins as the competition is generally lower for many. Remember that most of the scholarships are renewable.
  4. Once you are done with your textbooks, sell them to the campus bookstore or try selling them online. Either way you will recoup some money by passing your used textbooks on.
  5. Get a part time job where you can work on your leisure time.

In conclusion, it is possible to save money in college so long as you know how to plan your funds. Always analyze your monthly expenses and plan on how to cut back. Maintaining a budget is not as straight forward as you think and it calls for a lot of discipline to do so. On the other hand, reduce all unnecessary expenses and by so doing you will realize your funds stretching further than you may think. Be sure to visit http://easyscholarshipsnow.com for more blog posts on this topic.

Invest and Saving For Your Future

We all work hard to achieve what seems like an impossible dream, a comfortable retirement. Retirement is a goal I have been thinking about since I entered the workforce. The common retirement age we often hear about is 65 years old. While there is certainly nothing wrong working until this age, I would prefer to retire much earlier. Regardless of what age you plan on retiring, the most important aspect it planning for it. Without having a clear and concise plan laid out it will remain an impossible dream.

Taking advantage of any and all retirement accounts is the number goal anyone should strive for. Whether it be a 401k, a Roth IRA, or even a Traditional IRA, you should be maxing these accounts out to the best of your ability. A 401k account is typically the most powerful tool you have in aiding a healthy retirement. Employers often pick up the cost of managing these accounts, and they typically offer some sort of matching employer contribution as well. It’s absolutely necessary that you invest, at a minimum, the amount that your company is willing to match…otherwise you are throwing away free money!

Retirement accounts are great and all, but with pensions becoming a luxury of the past it is important to save and invest in any way possible. Any funds leftover after maxing our pre-tax accounts should be going straight to your bank account. While it’s important to have a healthy emergency fund, it’s also vital that you save enough money to cover any gaps between your actual retirement age and when you are able to access your retirement accounts without penalty. 59 ½ is the general age that you can access your retirement vehicles without a penalty. Personally, I am looking at a retirement age of 55 hopefully. This means that I need accessible funds to get me through 4 ½ years until I can tough my 401k and IRA.

In addition to saving money in a bank account, you should protect yourself against inflation as best as possible. An online brokerage account is usually the best way to go. You can invest in a low-cost index fund that pays dividends. These are generally low risk investments that help you outpace inflation and keep more of your money. I have an automated deposit setup to flow into my account on the 15th of each month, thus allowing me to take advantage of dollar cost averaging.

 

Bond Basics: How Bonds Work

Whenever you drive down one of America’s highways, or see a factory expanding in the city where you live, you’re seeing bonds in action. The fact is, bonds are used by both the federal government as well as local and state governments, and private enterprise, to generate the funds they need for expansion, development and long-term infrastructure projects.

What most people don’t realize is that the bond market in the United States is even bigger than the stock market, and that it plays a huge role in the global economy as well as in the lives of practically every American. For example, while the NYSE, NASDAQ and AMEX stock markets have an average trading volume of around $110 billion, the US Bond Market has average trading volume of almost $850 billion.

When you see a bridge being built, you can bet that bonds are what paid for it. New transportation systems that move us around, power plants that give us electricity and sewer systems that bring water to our homes and take waste away are all financed with bonds. In fact, if it wasn’t for bonds, many of the systems and infrastructure that we all take for granted would eventually break down and fall into disrepair.

So, how do Bonds work, exactly?

Bonds start when a government entity or private enterprise issues a bond in order to raise money. They are the borrower and make a legally bound promise to repay the amount of money that they borrow back to the bondholders at a specific time in the future. The amount borrowed is known as the principal or face value of the bond and the payoff date is known as the redemption or maturity date.

The best part however is that the bondholder doesn’t just get their money back, they also get interest, which is known as the coupon rate or coupon, twice a year (in most cases).  In effect, the interest that is paid to the bondholder is the compensation that the government entity or private enterprise is paying in order to borrow the money they paid for their bonds.

Bonds that are issued by the United States government are usually bought directly by the investor but almost all others are purchased indirectly through broker – dealers at either banks or brokerage houses. These are known as the “underwriter” and they act as the intermediary between the issuer of the bond and the buyer/investor.

New bonds are purchased on the primary market and, if someone purchases a bond but wants to sell it before its maturity date, they can sell it on the secondary market.

Over the last few years the pricing of bonds has become much more transparent due to better industry regulation, and investors can see real bond prices on websites like www.investinginbonds.com and others. If you have any questions about purchasing bonds, or selling bonds that you already own, please let us know and we’ll get back to you with info and advice ASAP.

Should You Invest in Bonds Near Retirement?

Even though many consumers are putting off retirement further and further these days, the fact is that you should still be planning for the inevitable day that you can’t work any longer, whether by choice or not.

One thing to keep in mind, as retirement gets closer, is that the “investment horizon” you have gets smaller, meaning that you want to invest in things that are less risky. For this reason many financial advisors suggest that consumers in their 50s and even in the early 60s dedicate at least 50% of their portfolio to Bonds.

One of the best reasons to invest in bonds is that they offer many different choices and sectors, giving you the ability to diversify your portfolio quite nicely. Many bonds can only be purchased for a $5000 minimum investment however, meaning that you need to have significant assets in order to put together a portfolio that includes different issuers, different market sectors and different maturities of bonds.

For that reason, you might wish to consider bond funds, unit trusts or exchange traded funds. That will make it a bit more convenient to diversify your portfolio, and more affordable as well. One caveat however is that they don’t offer the same promise of a specific maturity date that a single bond will give you.

Depending on the tax bracket that you happen to be in, it might be more advantageous to purchase tax advantaged bonds that are issued by either federal, state and/or city governments. The reason is simple; any interest that is paid to you on US government securities will, in most cases, be exempt from both state and local income tax. If you live in a state where taxes are high, this can be crucial. Interest that you get on municipal bonds is exempt from federal income tax and, in many cases, exempt from state and city income tax also.

One excellent way to invest in bonds is called “laddering”, which along with diversification lowers your risk. An example is to purchase bonds with different maturities that are staggered over 1, 3, 5 and 10 years, reaching maturity at those times and making sure that, no matter what interest rates are in effect at the time, your bonds still deliver a good return. The reason is that, if interest rates are rising, your short-term bonds that are maturing will let you reinvest at a higher rate and, when rates are dropping, your longer-term bonds will still be paying you with their higher coupons.

If you have any questions about investing in bonds, or about personal finance in general, please let us know by commenting or dropping us an email, and we’ll get back to you with advice and answers ASAP.

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