Investing Your Money- Part 2

Earlier this week, I discussed the basics of investing and how to know whether or not you’re ready to invest.  Once you’re ready to start investing, the next question is how to create an investment plan and where to go to do so.
Creating a Plan:
The next step that occurs before investing is creating an overall plan of what you are trying to accomplish.  Set financial goals and determine how much time you have to reach them.  Part of this step is to take your tolerance for risk into account. Next you would decide how much money you need to invest every month, and the risk of investments you need.
Where to go to Invest:
After considering these factors, the next step is to decide where to go to actually start investing.  There are many ways to do this, but for now I will discuss three of the most common ways to invest:
  • Employer: If retirement planning is a main financial goal, this is a great place to start.  Many employers match part of your contribution to a 401(k), or other type of retirement plan.  This is free money and should always be taken advantage of, even if it means more of your paycheck is deducted for your retirement investments.  If you currently don’t have a job that offers this, consider looking into employers that do.
  • Online Trading: This investment tool is useful for those wanting to invest in the stock market who feel comfortable enough doing so without an investment adviser.  It is advised that only those who are well-educated about the stock market trade online.  The benefit of trading stocks this way is that there is no fee toward paying a stockbroker; however, other online fees may apply.
  • Professional Stockbroker: It may be beneficial to work with a professional who has knowledge and experience in investing in the stock market. Although it is impossible even for a professional to predict stock market changes, they have studied the market and are trained to advise customers based on their goals, philosophy, and risk tolerance.  The extra fee that goes toward a professional pays for both their knowledge as well as help with portfolio management.
Finally, it’s worth mentioning that one of the most important pieces of advice you’ll ever hear about investing is to start as early as possible.  The earlier you start, the easier it is to achieve financial goals.  There are two main reasons for this: 1) Compound interest accumulates more over a longer period of time and 2) Investment risk is evened out over a longer period of time.
Investing may seem big, scary and something you want to put off until age 35, but it’s not as daunting as you may think and it is necessary to meet financial goals. Finally, if you have any questions about investing, please come talk to us at the Student Money Management Center.  We can’t give you specific advice about what securities to invest in, but we can help guide and prepare you through this important aspect of your finances.
Post written by Amanda Owens, SMMC Program Assistant

Investing Your Money- Is Starting at Age 20 Too Early?

What’s on the mind of the average twenty something? School, work, dating…investing?  Probably not.  But depending on your current financial situation, it should be.  Although it may seem overwhelming to think about, there are numerous resources available to you to help you get started with investing if the time is right.  Here are some basic things to know:
What is investing?
Investing is taking some of the money you have from your income or in savings and putting it to work in the hope that it earns more money.  The most common ways people invest are by putting money into assets such as stocks, bonds, mutual funds, and real estate.  This is different than saving, where money is simply put aside in an account and is not to be spent.  Although it is important to have a savings account for easy access to cash, saving is not enough to achieve long-term goals, such as retirement.
Are you ready to invest?
As a twenty something, you may still be in school and have limited income, or are just starting out on your own and spend most of your income on bills  However, there are several signs you might be ready to begin investing:
  • You live within your means
  • You are able to save regularly
  • You use credit wisely
  • You carry adequate insurance
If you find yourself in most of these categories, it may be time to consider investing.  The next step is then to decide why you want to invest.  Here are four reasons to invest, and many people invest to achieve all four:
  • To achieve financial goals (vacation, purchasing a home or car, etc.)
  • To gain wealth and financial security
  • To increase current income
  • To meet retirement income needs
Unfortunately, investing is not completely free of risk-meaning you aren’t guaranteed to make money off of every investment.  In the next post, I will discuss different types of securities, risk and diversification, and where you need to go once you’re ready to invest.
The most important takeaway is to realize that investing takes discipline.  You’re going to have to trade off between spending money now in order to grow your wealth over the long term.  We guarantee though, the sooner you get started, the more your future self will thank you.
Post written by Amanda Owens, SMMC Program Assistant

“Chopped” Cooking Competition

Last week, the Student Money Management Center had the opportunity to be a part of a Campus NightLife event that was a combination food drive/cooking competition. Competitors and spectators were all asked to bring food items to donate to OpeN Shelf, UNL’s campus food pantry, located in the Lutheran Center. OpeN Shelf is available to all UNL students who are having trouble affording basic necessities such as toiletries and food. Students are encouraged to stop by OpeN Shelf during the school year on Monday mornings and Friday afternoons. For more information on OpeN Shelf and their hours/location, please click here.

For the cooking competition, there were 4 pairs of UNL students and dozens of supportive on-lookers. There were 3 rounds- appetizer, main course, and dessert, where the teams had a certain time limit to make a dish to impress the judges. After each round, one of the teams was “chopped” from the competition, based on which dish the judges liked the least. In addition to the competition, there were other activities for the spectators, including demonstrations of how to make healthy meals by chefs (including samples!), a sugar cookie decorating station, the “Chopped” Wii video game, a station to teach students how to properly use knives and cut up veggies for healthy snacks, and booths explaining the missions and services of OpeN Shelf and the Student Money Management Center. We had a great time being involved in the event, and it looked like the students had a lot of fun too! Thanks to Campus NightLife for a great night!

Moving Into a Dorm for the First Time? Costs to Plan For:

Starting college is full of brand new experiences, one of which is often moving out of your parents’ house for the first time to live on your own. Moving into a dorm is very exciting, but there will be additional costs that you should start planning for now, instead of waiting until move-in weekend and binge shopping at Target.

-Dorm room decorative items such as rugs, lamps, picture frames, posters, etc.

-Furniture such as a futon, extra chairs, etc.

-Sheets, comforter and pillows for an XL twin bed

-Microwave and mini fridge if you’re dorm doesn’t have them already and allows them

-Towels and washclothes

-Cleaning supplies such as disinfectant wipes

-You might want to bring some dishes and silverware (real or plastic) for those times you order in a pizza or you just want to have Easy Mac so you can keep studying for finals

You’ll also need to plan for increased expenses that your parents may have been helping you out with before, such as

-Food- even if you have a meal plan, you can’t raid the dining hall at midnight if you get a craving. You’ll have to start buying your own snacks for in between meals. You also might get tired of the dining hall every so often and want to go out to eat, just don’t make it a habit!

-Entertainment- with all of the new friends you meet, you might want to go to concerts and movies and sports games together. Just be sure to stay within your budget! You might have to say no sometimes.

-Laundry- you’ll need laundry baskets or a hamper, laundry soap, and probably a bunch of quarters!

*Pro tip: Make sure to talk to your roommate about who is bringing the big items such as a tv and a futon- you won’t have room for two of each!

 

Moving into an Apartment for the First Time? Costs to Plan For:

Many freshmen will transition from dorm living to apartment living after school gets out for the year in May. If this is you, start to plan for the additional costs that you will have, including:

Increased Expenses

  • Food- maybe you buy snacks for yourself now, but you’re going to have to start making all of your meals now, which can be a big change if you had a meal plan for the dining halls. If you need tips on how to save money on food, check out our last blog post, Eating Healthy on a Budget.
  • Cleaning supplies- you probably have a few cleaning supplies (hopefully!) from your time in the dorms, but you’ll need some additional things as well, such as a vacuum, broom, cleaning rags or paper towels, cleaning spray, toilet bowl cleaner, etc.
  • Decorative items- even if you had decorated your dorm, you will have more than one room that you can decorate now. Start looking for sale items now so you aren’t tempted to binge spend at Target right after you move in.

New Expenses

  • Rent- Strongly consider finding a roommate/s to cut down on rent costs. Most places will make you sign a 12-month lease, so make sure you know how you’re going to pay for rent over winter and summer breaks, especially if you’re planning on going home or your work hours or job will change.
  • Utilities- you will have to pay for electricity, and maybe gas, water, and trash as well. In Lincoln, you can call Black Hills Energy and Lincoln Electric System to get the average costs over the past year for the apartments you’re looking at renting. Of course, your utility bills will vary based on your usage, but the estimates can be a good starting point.
  • Furniture- maybe you already have a futon, but you’ll need a bed, a dining room table, and maybe other things like coffee and end tables, couches, and chairs. Try hitting up some garage sales and asking family if they have anything they don’t need anymore.
  • Entertainment- you probably didn’t have to pay for internet or cable in the dorms. Don’t get a big package you can’t afford!
  • Set-up fees- some utilities will have one-time set-up fees that you’ll have to pay, especially if you have to open a new account or have someone come install equipment.
  • Kitchen items- it can cost quite a bit to stock a full kitchen, but you’ll definitely need the basics such as a microwave, kitchen trash can, toaster, pots and pans, silverware, dishes, knives and cutting boards, mixing bowls, and other kitchen gadgets. Look for sales or ask for them for gifts.
  • Bathroom items- shower curtains, rugs, soap dispensers, etc.
  • Renters insurance- this is a must have that averages around $10-$15/month. Your landlord’s insurance will only cover the building, so you need your own insurance to cover all of your stuff in case something happens!
  • Miscellaneous items- such as curtains, bookshelves, and rugs

*Pro tip: Make sure that you have an emergency fund so that if you need to work less during finals or holiday break, for example, you still have enough money to pay rent so that you don’t get kicked out!

If you need help making a budget or planning for your transition to apartment life, feel free to make an appointment with us at unl.edu/smmc