Leveling Up Your Wealth While Still in College

By Jody Bell

As cliché as it sounds, I grew up obsessed with Starbucks. 

Back in high school my mom and I quite literally had a weekly Starbucks routine. We would drive, get our lattes, and sit in the car doing nothing but enjoying our drinks each Saturday.

Then I entered college, and I wasn’t sure I could justify spending $5-7 for a cup of coffee. I had two jobs, lived off of cheap processed food, but I still seemed to be struggling to make ends meet. The truth is I had plenty of income, but just wasn't smart with my money.

I’m a Finance major, and as I learned more about the intricacies of money and investing, I realized that I was the problem. I had no real budget and justified eating daily takeout because it was relatively cheap. I had far too many subscription services, and honestly I wasn’t sure what my recurring expenses were. In general, I had no handle on my financial health.

Although my income didn’t change, I now have two portfolios for my investments, and have built up a healthy savings account. And guess what the best part is – I still make space in my budget for my Starbucks.

You most definitely don’t need to be studying Finance to make major changes in your financial health – in fact we’ve laid out our top 5 ways you can start building your financial health while still a full time student!

1. Get a handle on your expenses and income

While this one may be obvious, many times people completely overlook taking a deep dive into their finances because they’ll realize there are some bad habits layered there. 

Depending on how many recurring expenses you have, you may want to turn to an app like Truebill. However, if you only have a handful, you could look into your bank statement and make a Google/Excel spreadsheet with your expenses. There you can add up your recurring charges, and see how much you spend on eating out/shopping/recreation each month. You can add these two amounts to see your average monthly expenses.

If you have income – whether that’s a job, allowance from your family, or a large sum of savings that you are budgeting out for college, you can put that on the spreadsheet as well. 

2. Create a budget with room to invest

Many people are surprised when looking at their total expenses – many of those small discretionary purchases really add up! That’s exactly where your budget comes in. 

Creating a budget doesn’t mean your entire quality of life changes. In fact, for many, their quality of life improved long-term because they’ll be able to save for bigger purchases, trips, and more expensive outings. Additionally, building a budget with room for investments means you’ll start to really accumulate wealth. The investments you’re making now could help fund the purchase of your first house!

All a budget should do is make you re-evaluate each and every purchase with a bit more of a critical perspective. Having a concrete understanding of how much you can allot for food, entertainment, etc., means you really think before tapping your card. 
Many people follow the 50/30/20 rule in which 50% of your income (or allotted budget for the month) goes to your needs, 30% towards your wants, and 20% towards your savings, investments, and financial goals. 

3. Assess your investment goals and start learning

The world of investments has a huge learning curve – and to many that can be incredibly intimidating. 

To start with, try to learn about some of the various investment objectives so you can understand what your approach should be. Are you prepared to make a long-term investment and leave your money locked in that investment for the next 10+ years? Or are you looking to learn more about investing as a whole, and you're interested in some more short-term trades. Do you want passive income periodically, or would you rather invest a lump sum of money and then receive a larger amount of money down the line?

4. Find your investing channel

As you research this, you’ll probably just start to accumulate more questions. Well, the good news is that there are plenty of apps that will teach you these concepts as you invest. 

It’s important that you start thinking about these questions, but you can absolutely start investing before you have them all answered. Truth be told, you won’t be able to accurately answer many of these questions until you’ve gotten your hands a bit dirty. 

So, I would recommend you look into a number of the emerging apps/services that provide you with options to actively trade (trade specific stocks), but also have automated trading options. 

SoFi Invest is a personal favorite of mine – you can choose to have the app invest for you or you could take a more active investing strategy. Either way you’ll have access to learning material as you go. If you want to take this a step further, Charles Schwab has an app that allows you to invest, is informative, but also teaches you how to monitor your investments and track what factors may affect them. 

If you’re just looking to start investing and not spend a bunch of time learning, I would recommend Acorns (which is one of my current personal accounts.) Acorns is incredibly easy to use – it will invest for you based on your risk preference, and put your money into a large and diversified portfolio (usually something referred to as an index.) My favorite feature is that you can continuously add to your investment account by setting up automatic weekly deposits and use their round-up feature — which will round up purchases and invest that additional money.

5. Find ways to monitor and stay active in your account

One of the biggest mistakes you can make is parking your money in an investment and then not checking on it. 

For long-term investments or strategies that use automated services, chances are your performance on the investment will be just fine. However, part of investing is watching your money grow and being a participant in that process. 

Even if you are just adding a few dollars a week and logging in to do so, that’s a great way to keep your investments on the forefront of your mind. If you are going into a more active strategy and learning about stock-picking, you may want to learn about how your holdings are affected by certain external factors. 

At the end of the day, working on financial literacy and improving your financial health won’t happen overnight. These tips are simply here to help you build your portfolio and wealth – this doesn’t even go into your credit score! So trust me, I know the world of finance is complicated, hard, and especially for young women it can feel lonely due to the lack of representation. That being said, learning and getting started now could seriously impact your life in 10,20, or even 30 years. 

So, start being accountable for those finances, make way for some investments, and I promise you – there can still be room for some Starbucks. 

** Note – none of the advice given in this article is intended to guide investment decisions. Investing holds inherent risk.** 

Jody Bell, 20 is Girls With Impact’s Editor in Chief and a program graduate from Greenwich High School. Girls With Impact is the nation’s only online, business and leadership program for girls 14-24, turning them into tomorrow’s leaders, entrepreneurs, and innovators.