How To Invest Your Savings As A Student

As a student juggling lectures, seminars, and all those pub trips, investing might not be the first thing on your mind. But overlooking investing would be a big mistake! Why, you ask? Buckle up, because investing is gonna be the key to growing those student savings.

As a student looking for guidance towards smart ways to earn, save, and invest, kickstart your journey to finance growth with Prograd’s 20-second form.

Where Should Students Start With Investing?

For any student, the first step is securing a savings account to safely stash their cash.

While there are various types available, a regular savings account is often the easiest for students. This not only acts as a secure storage space but may also provide opportunities to invest in stocks and shares, potentially growing your money further.

Cash ISAs and stocks and shares ISAs offer similar options, allowing you to either stash your cash or invest in stocks and shares. While cash accounts are deemed safer, stocks and shares accounts can yield greater rewards over time.

And there’s more! Prograd has a bunch of savings accounts to choose from, providing the perfect spring board to leap off from to achieve those savings dreams. Get started with saving today!

How Does The Stock Market Work?

The stock market. It's not just a place for Wall Street elites in power suits. It's a dynamic playground where regular folks, like students, can grow their money.

Stocks represent ownership in a company. When you buy a stock, you're essentially buying a tiny piece of that company. As the company grows, so does the value of your piece. Bonds are a little different. When you buy one, you’re basically lending money to a company with the promise they’ll pay you back plus interest.

On the other hand, mutual funds allow you to invest in a diversified portfolio without the hassle of managing individual stocks or bonds. As this reduces the risk of investing, it offers a straightforward entry point for student newbies.

Investing in a diverse portfolio can also help to build your investment portfolio. Blend stocks, bonds, and maybe even some crypto to mitigate your investment risks.

Speaking of stress-free investing, make sure to check out Index funds and ETFs (Exchange-Traded Funds). These are like investing on pilot mode, offering a piece of the entire stock market without the stress of choosing specific winners and losers.

Now we’ve let our players, let’s take a look at the stock market!

Stocks are bought and sold on exchanges. When a company is doing well, more people will want to buy its stock on the exchange and, when it’s struggling, its value can dip. This makes investing a little risky. So, it’s important to conduct a risk assessment when investing. Think - what’s your risk tolerance? How much risk you can handle without losing sleep?

As a student just starting out, a slow and steady approach should be your vibe.

How Can Students Stay Safe When Investing?

To keep your investment journey safe and smooth, financial literacy is your armour. Terms like GDP or inflation should be more than jargon - understanding economic indicators empowers you to make informed decisions.

Luckily, platforms like Prograd can provide valuable articles to bolster your financial knowledge.

Additionally, delving into the tax implications of investments is crucial. While some accounts offer tax breaks, others might surprise you with a tax bill upon earning interest. Make sure to research this beforehand to ensure you're not fit with any nasty financial surprises.

But investing shouldn’t just be safe for you, it should be for the world too. Ethical investing lets you put your money where your values are. Invest in companies making positive impacts - eco-friendly, socially responsible, and all that good stuff.

Speaking of keeping your investment journey smooth, say hello to investment apps. Popular apps like eToro, XTB and Trading 212 are easy-to-use interfaces perfect for any student starting out.

Finally, to make investing even easier, why not try out automated investing? We all know students are busy bees. With automated investing, you can set up automatic contributions to your investments, let the magic happen and your savings grow without lifting a finger.

How Can Investing Help Save For The Long-Term?

When it comes to investing, you’re not gonna become a millionaire overnight. But if you want a secret tip in growing those savings fast, let us introduce compound interest.

This earns interest on both the original amount and the interest earned. Starting this process as a student will set the stage for big moolah later in life!

Speaking of which, while retirement may seem like lightyears away, it’s actually well worth thinking about it as a student.
We know this sounds crazy, but this is where you gotta think about the time horizon of this investment. In other words, the longer you let your money grow, the more it multiplies.

For the slightly nearer future though, an emergency fund will definitely come in handy too.

We all know life is unpredictable - cars break down, laptops crash, urgh. Build an emergency fund for those rainy days, so you won't have to sell your precious investments at a loss when life throws a curveball.

Conclusion

Investing as a student may require some sacrifices, but the potential benefits are immense. Trim down on unnecessary expenses, set clear financial goals, both short and long-term, and budget for your investments to watch your student savings evolve into a thriving portfolio.
Trust us - your future self will thank you for the head start!

Interested in continuing your journey towards financial literacy and saving success? Get started with Prograd today.