How to Start Saving Money While in College

broke college student to rich luxury

College is a time to be thinking about what you want out of life.

Maybe for you, that’s a home built with the latest and most luxurious features.

There are few better purchases to splurge on than the place where you spend most of your time, and being able to wake up and fall asleep in a place built for your comfort and rejuvenation brings a hard to find satisfaction anywhere else.

Of course, a luxury lifestyle is a lofty goal, one that can even seem terrifying when you’re a young college student living off of ramen noodles.

It’s not impossible to go from broke college student to someone who lives a luxury lifestyle, but it will take a lot of preparation and planning.

You want to make a few decisions right now, so you can create a plan for your future and put it into place. Here’s how to get started…

Rate Search: Get Approved for a Mortgage

Step One: Collect Information on Your Major/Career

You’ll need real numbers to work with for some of the later stages of these instructions, so your first step is to collect some. First, you need to understand the long-term salary expectations for your major or career path. Find and record for later…

  • The amount you can expect to make as first-year hire
  • The speed at which you can expect raises
  • Where that puts you in 5, 10, and 20 years

You can find this information online or speak to your college advisor for personalized (and likely more accurate) advice. Not all talents are as well compensated as they should be, but you should learn early that those limitations don’t have to stop you from owning the luxury real estate of your dreams.

With the right planning, that goal isn’t out of the reach of an artist, educator, or committed non-profit activist. However, achieving it without a lucrative career will mean focusing a lot of attention on the next two steps.

Step Two: Find Out Where You Belong

It would help if you took any chance you can to travel over the next few years. Experience as many different environments as possible. Try to spend some time in cities and the country, on the coasts and up in the mountains, in hot and cold places.

You’ll know when you’ve found the right place when you already feel at home even before you’ve begun shopping for one.

Location plays the most significant role in the value of luxury real estate. If you find that you like areas that aren’t in high-demand, you could find yourself far closer to achieving your dream than you first thought.

A lot of travel will also help you understand what you like most about the places you want to live. With that knowledge, you may be able to find a more affordable location that still offers you nearly everything you want.

Wherever you choose to live, make sure that you understand the realities of the property market there. Begin tracking homes and neighborhoods you like as early as you can using real estate searches so that you can begin thinking about the real numbers involved in moving there.

Step Three: Develop Your Savings Plan

With your projected salary information and the estimates of your real estate costs in hand, you can begin thinking about your savings plan for the next 10, 20, or 30 years. Your savings plan’s goal is to amass a down payment equal to 20% of the total cost you expect to pay for your luxury home.

If you haven’t already, you need to start a permanent budget as soon as possible. Track your spending every day, and try to set limits your expenses wherever you can so you can test the limits of your ability to save. It will take a lot of discipline to save for a home, so you should start developing the habit right now.

Step Four: Practice Good Habits to Improve Your Credit Score

Your credit score is critically important when it comes to property purchases. Having a higher credit score means you often have access to better rates when financing. In the long term, what that means is saving a significant amount of money on the total cost of your luxury real estate.

With the right work on your credit score, you could afford the home you want earlier, even if you don’t make as much as you planned.

Now, Keep a Sharp Eye on the Market

With these steps in place, your next step is to start tracking the listings in your chosen area.

Though you won’t afford your luxury real estate yet, you should still start developing a feel for how quickly the market moves and what makes something stand out as a bargain.

You could shear years off of the time you need to save for your home if you’re quick enough to catch an amazing deal. That takes constant vigilance, and I wish you all the best of luck.