Why is it necessary to save money as a student? The number one reason is it protects your financial future. The future seems so far away until it comes in faster than you expect. Too many people live in the present without thinking about the future. That’s not right.
I get it. When you’re a student, you’re in your teens and think that you’ll be young and invincible forever without any health problems. That’s just not true. Even white collar workers who don’t work in the manufacturing field experience chronic health problems.
Even the ones who works out every day and eats right has health problems. One of my friends’ best friends was in the best physical shape of his life, working out every day and doing cardio. However, one day, after running a marathon, he goes back to his house. He’s drinking water.
Then suddenly, he collapses to the floor and dies. At the ripe age of 46. Turns out, he had a rare heart problem he didn’t even know he had which limited his ability to do extreme exercise. He’s been doing extreme exercise over the years and decades.
The good times last until they don’t. Why is it necessary to save money as a student? The bad times will come and happen at some point in your life. It may not be tomorrow or the week after. However, EVERYONE on Earth experienced bad times at some point.
It’s only a matter of time before it happens to you.
Why is it Necessary to Save Money as a Student? 10 Reasons
Why is it necessary to save money as a student? The 20 concrete reasons are as below. There’s no reason to be like every other student out there who graduates filled with debt and no real life experience.
1) It Protects Your Financial Future
Many students don’t think about their finances. All they care about is school and getting good grades. That’s just not good. In real life, people don’t care which school you went to. The only ones who care are the jealous parents who compare their child’s education to someone else’s child.
Why is it necessary to save money as a student? It protects your financial future. Your financial future comes in much sooner and earlier than you think. Time passes by without your control and whether you want it to or not.
The reason why I have $400,000 in my late 20’s is because I saved and socked away a large chunk of my paycheck. Without fail. My friends were buying Teslas and watches. I was buying the S&P 500 and saving as much of my paycheck money as I could.
Your financial future matters more than you know. My financial future is now set as a result of the choices I made 5 years ago. No one can compete against that level of a head start.
2) Why is it Necessary to Save Money as a Student? Money Compounds
He who doesn’t understand compound interest pays it and he who does, earns it. Earning compound interest is phenomenal. There’s less work I need to do every year while I get richer every year. When you make more money while you work less, that’s a recipe for success.
Working more to earn more money is overrated. You want to earn more money while working less every year. That’s the goal. People who don’t understand anything about money will tell you hard work is the answer. No. Smart work is the answer.
With 30-year treasuries paying 4%+ at the latter half of 2022, I could’ve literally lived for free by dumping my entire $400k fortune in 30-year treasuries. My bare bones budget is close to $15k per year. Why is it necessary to save money as a student?
Because none of my friends had this ability to live for free because they didn’t understand the most important concept of money. Compound. Interest. Your money should be your hardest working employee.
3) It Helps Buy a Car
Cars are a necessity in America. I bought my first car when I graduated college. It was a 2015 Nissan Versa Note and I paid $10.3k for it. It had 40k miles and I took good care of it until it got ruined in a car crash in 2022.
When I bought the car, I paid all cash for it. None of this origination fee, checking credit score, and the like. None of that process. Just a simple transaction in which I pulled out a checkbook, wrote a check, and I was on my merry way.
Why is it necessary to save money as a student? it helps pay for a car. I need a car. Transportation is an advantage you use to compete against someone else in the world. If someone has more efficient and better transportation to be more present in meetings and work?
Then it’s difficult to compete against them.
4) It Covers Moving Costs for Your First Job
My first company paid me a $3.5k signing bonus. The $2.5k after taxes helped me cover the moving costs to move from Austin, TX to Birmingham, AL. Why is it necessary to save money as a student? While some companies offer signing bonuses to move, not all companies do.
If the economy is going downward, some companies just may not be in a financial position to do so. Not only were signing bonuses cancelled during the Great Recession, job offers were flat out cancelled. Even the ones who had a job offer stay intact had a hard time relocating to their new employment place!
Thankfully, I actually moved everything myself. I didn’t hire any movers. I had no furniture and my mattress fit inside my car. Therefore, I actually banked the entire signing bonus because I didn’t pay anything out of pocket.
However, I’m not like most students. Most of my friends had furniture they needed to move.
Your savings can cover relocation expenses for your first job.
5) It Removes Your Dependency on an Employer
Dependency is the worst thing in the world. When you are dependent on someone else, they have power over you. You can never say no to them because if they cut off the money supply, it hurts you more than it hurts them. Your employer may not grow their business as quickly as they would like.
But you can’t even put food on the table. Why is it necessary to save money as a student? Take it from me, who’s been financially dependent on some pretty bad employers. They will use you to their benefit and interests in any way that they want.
They will not shy away from using you to further their interests. That includes you exhibiting signs of being overworked. They don’t care about you, they just want you to further their interests and increase their profits. Even at the expense of your health.
If you can’t cut it, they’ll just find someone else who will. Being dependent on an entity like that is not a winning strategy.
6) You Have More Options to Take Risks
If there’s ever a time to take risks, it’s in your 20s. In your 30s, if you have a family, it’s much harder to take risks. Why is it necessary to save money as a student? You can take more risks. I can take another job more easily without worrying about the consequences.
I can start another business with the money I saved up to start the side hustle. Whatever the case is, money gives you the security with which you can take more risks. My multi six figure portfolio is what allows me to take risks.
There are many of my friends who is chained to their employer because they can’t do anything else. Not because they don’t want to do anything else. But because they physically cannot do anything else. They don’t have the money to do so.
When you have savings, you just have much more options to pursue your interests and passions outside of work.
7) Saving Money is How You Get Ahead
There isn’t a single rich person in the world who didn’t save money. Why is it necessary to save money as a student? That’s how you get ahead of someone else. The savers will always stay ahead of the spenders at the end of the day. Many people complain the rich get richer and the poor get poorer.
That is because they think income is what gets them ahead. Income is what helps accelerate the financial independence journey. Savings is what helps start the financial independence journey in the first place. Saving money is how you get ahead.
Assets are what makes someone wealthy. Nothing else. How will you buy assets if you don’t even have the money with to invest? When I bought my new MacBook Pro during Black Friday, I suspect the investment will pay off in spades over time.
However, not everyone can afford the $1k price tag investment. You can’t buy assets without having money in the first place.
8) To Pay Off Your Student Loans
Americans have $1.75T in student loans. That’s a LOT of money to pay off. Debt is sacrificing future returns for present consumption and benefit. You can’t pay off your student loans if you don’t have money to do so. When I graduated, I worked 2 jobs every year.
I saved the dollars and socked away as much money as I could. By graduation, I had $40k in the bank. While my friends had $10k – $40k of student loan debt. That’s a significant head start my friends didn’t have. That felt amazing.
Why is it necessary to save money as a student? Your student loans are what chains you down in the world. I took on $15k of low interest debt in 2021. I could well afford it. However, just the thought of owing someone money didn’t sit right with me.
It affected my psyche on an unconscious level and I couldn’t perform at my peak. Paying off student loans will feel amazing just the same way.
9) To Deal With the Rising Costs of Living
Not only is inflation at decades long highs, the government thinks a $1.7T spending bill is the best way to fight inflation! Here is the clear misalignment between the citizens’ interests and the government’s interests.
If your cost of living is manageable today, there’s no guarantee it will stay manageable throughout the next decades.
The government knows fiscal responsibility yet they refuse to implement it. Why is it necessary to save money as a student? The government refuses to lower the cost of living for its citizens. Any way they know how to decrease your financial quality of life, they’ll do it. All they care about are votes.
I personally thought I was going to go all out with my spending in 2022. However, that didn’t turn out to be true. Instead, I went back to the basics and started to live on $1.5k/mo budget. Even as my income increased. There’s nothing wrong with saving money.
It’s a tool that lets you play offensive in the good times and defensive in the bad times.
10) Why is it Necessary to Save Money as a Student? It Removes Waste
America is the land of excess. We take it way too far. Anyone who’s been to Costco knows what I’m talking about. Many consumers don’t even consume all they bought from Costco by expiration date. So they overspent and wasted money on products they didn’t even use.
Why is it necessary to save money as a student? It eliminates waste and lets you live on enough. Enough is a nirvana word where everyone benefits. No one has excess and no one has too little. If you have a surplus and savings at the end of the month, it means you’re not producing excess waste.
I don’t drive a $30k car. Instead, I drive a $15k car that reliably takes me from Point A to Point B without any problems. I don’t buy excessive things from the grocery store. I buy just enough to float me throughout the next few weeks.
Then I repeat the cycle again. It’s how I not only eliminate waste for the environment but build wealth at the same time.
Why is it Necessary to Save Money as a Student? Lots of Reasons
I know how you feel. When you’re a student, your 30s and 40s just seem so far away that it doesn’t make any sense to save money at all. That’s not the right way to approach your finances. The choices you make today compounds to much larger effects down the road.
Why is it necessary to save money as a student? You can get ahead of your peers much faster in a much more dramatic way. While your $100k job friends are spending money to their heart’s desire, you’re building real wealth at an $80k income.
Wealth is the true measure of how well you are doing financially. Not income. Not expenses. But wealth. Wealth is what generates cash flow for you to live on. Imagine your excess cash flow paying for 100% of your life while you save 100% of your paycheck.
Then your wealth building accelerates that much even faster. Once you pass the $200k wealth mark, everything snowballs even faster. The less you become dependent on your employer, the more risks you can take. The more risks you take, the more failures and successes you experience.
Why is it necessary to save money as a student? That’s the game of money that few understand. Many do not understand just how impactful compound interest is to their lives until it’s too late. One year is an eternity’s amount of time to achieve significant progress.
Saving money is a surefire sign of progress.
Why is it Necessary to Save Money as a Student? Shortlist
- It protects your financial future
- Why is it necessary to save money as a student? Money compounds
- It helps buy a car
- It covers moving costs for your first job
- It removes your dependency on an employer
- You have more options to take risks
- Saving money is how you get ahead
- To pay off your student loans
- To deal with the rising costs of living
- Why is it necessary to save money as a student? It removes waste
