How to Manage Your Cashflow in College and Save for Your Future

This is a guest post by freelance publisher Amanda Brown.

When emergencies come up, or when you’re ready to retire, you should have enough cash to cover expenses. Here are four steps to take to make sure you have enough cash when you really need it.

Allocate A Portion of Your Income to Savings


Image via Flickr by Tax Credits

Saving for the future is easier than you think. Many employers offer retirement plans that automatically take out a portion of your pay and saves it or invests it. This account will be there for you when you retire. Another option is to automatically transfer a specific amount of money from your checking account to your savings account each month.

Buy CDs and Mutual Funds

Another option is to make a large initial savings deposit or investment, instead of a small portion of your income, and set it aside to grow with interest. The two most popular options include buying certificate of deposits, or CDs, and mutual funds. CDs usually have a set interest rate and a period of time that you have to leave your money in the account. At the end of this period, you can withdraw the cash you saved and the interest it accrued. Mutual funds are a type of investment similar to stocks. You can purchase a number of shares in a fund or simply invest a specific amount of money. Let it grow for a time. There is no set period. Simply sell the shares when you need money. Both of these types of savings have no risk so it’s safe to keep your money in CDs and mutual funds.

Avoid Purchasing Expensive Items in Cash

If you are saving to buy a large screen TV, make home improvements, or buy a car, and you worry about covering your normal expenses, it’s probably not a good idea to use cash to make the purchase. This may cause a strain on your finances, especially if you no longer have a steady income, or worse, lose your job. This may lead to missed payments and eventually bankruptcy. For legal advice, consult the attorneys at Rosicki Rosicki and Associates. Read about their law firm on the Rosicki Rosicki and Associates blog.

Instead of using cash, make the purchase with a credit card or apply for a loan. The low monthly payment and long repayment term will spread the cost out and make your cash last longer.

Stick to a Budget

The final advice for managing your cash flow is to make a budget and stick to it. Set how much money you can spend each month and avoid going over your limit. Even if you have saved money, in this uncertain economy, it’s not worth spending more than you have to. Do, however, include items in your budget that you can look forward to, such as a vacation.

These savings tips will prepare you for the future. Don’t put your finances at risk with unnecessary spending and shortsightedness.

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