2014 Challenge Week 3: Discover the Power of Savings

Developing good savings habits early can help you create a financial cushion for emergencies and reach your long-term savings goals like buying a more reliable car or making a down payment for a house. In fact, even putting aside a small amount each month can quickly add up.

To help you visualize the benefits of saving, try out this handy calculator. Simply:

  1. Enter an amount you can afford to save each month
  2. Type in the estimated interest rate you expect to receive
  3. Plug in the number of years you plan to save
  4. Then just hit Calculate!

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Be sure to post a comment about what you discovered, what you are savings for; or your own saving tips for other students right here on One For Your Money and get entered for a chance to win a $25 gift card*.

Keep in mind that most financial planners recommend setting aside at least 10 percent of your income to create an emergency fund equal to 3-6 months of your living expenses. This may be difficult for most college students, but here are some suggestions:

  • Plan to set aside a small amount from each paycheck, even if it’s just $10.
  • Try saving an amount equal to what you usually spend on things that you don’t really need such as coffee or fast food.
  • Track your expenses for 1-2 weeks to identify specific expenses you can cut back on.
  • Get started on a budget for next semester, including a plan for how you might not have to borrow as much for school.

So start saving now and pave the way to a bright financial future!

*Details and official rules here

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Showing 2 comments
  • AlexisElac18

    I learned that If I save over $500 each month, for two years, I would have saved a total of $12,117. It may seem like a small amount of money, but If I would have spent that money on unnecessary items, I would not have had any saving left for me in case of emergencies. I know that it hard to save money when there are things that seem necessary for us to have at this moment, but we have to realize that saving money can help us cut off a large percent of our expenses and with a budget plan, we can save even more, In this economy, it is essential to start saving money.

  • tavia8910

    I learned that if I save $100 a month at a 1% interest rate, I would save $12,615. That is NOTHING for the span of 10 years! However, it is an extra $12,615 in my pocket that I wouldn’t have had otherwise. I would want a much higher interest rate if I’m going to save $100 a month. I do want to learn more about savings and the best places to have a savings account. Are they with your bank? I think it would be amazing if Higher One offered students a savings account. Even if there is no interest rate for that account. I think it would help by having that money in a separate account because then we would have to do a little extra work to use that money when we wanted (transfer those funds to checking account).