Do You Have More than the Average College Student Net Worth?
Have you ever wondered how you compared to your peers when it comes to your net worth? What is the average college student net worth, and more importantly, how do you improve your net worth? Those are the questions that we will answer today.
It’s no secret that college finances can be difficult, but you might not be as behind as you think you are, and after reading this article you’ll be well on your way to being ahead of all your peers. First, we need to understand the baseline, the average college student net worth. Once we know the average college student net worth then we can start to improve it.
What is the Average College Student Net Worth?
Students are in a bit of a tricky financial situation. They have tuition to pay, rent to support, food to buy, and a plethora of other expenses. Tuition itself can drive students to get thousands of dollars in loans if they don’t save money and budget properly.
Maybe you’re a couple thousand dollars in the hole and you’re thinking “why am I so behind?”
You’re actually not behind at all, in fact, the average college student net worth is roughly negative $20,000. That’s right, the average college student net worth is $20,000 in the red.
The majority of this comes from student loans, but housing expenses and car loans can take a significant chunk of any college student’s budget. So how much money does the average college student have? Not zero dollars, negative $20,000…
Those numbers are pretty rough, but the important thing is learning how to improve your net worth, and it can be broken down into 3 simple steps.
How to Improve Your Net Worth as a College Student
Maybe you’re in debt or maybe you’re flying high in the green, either way these 3 steps will help you increase your net worth fast. As a student you are not doomed to a lack of financial security, in fact, as a student you have one of the best opportunities to grow your knowledge, earning potential, and skill set. After all, this is what I did to gain a net worth of over 35k by the age of 22. If I did it, so can you.
Improving your net worth has a simple path. You earn, you budget and save, and you invest.
That seems straight forward enough, but how do you actually apply these principals to accelerate your net worth growth? Let’s start by earning.
Improve Your Net Worth: Step 1 – Earn
Earning is often times seen as the hardest part of the process when you’re a college student just trying to scrap by living. You don’t have your degree yet and you likely aren’t sitting on a nice salary and benefits package, however, there are still ways to earn some big cash.
Get a Job
The first and easiest way to earn as a college student is to get a part time job. You can do anything from waiting tables to deep sea diving instructor. Businesses are always looking for college students to bolster their business by bringing youth and energy to their team.
I have a friend who currently does late night cleaning for restaurants and gets paid $25 an hour. He is able to put away that extra cash and save it for tuition payments.
When I was in college I worked a total of 3 different jobs. I was a delivery driver for Jimmy Johns (I racked in a lot of tip money), I was an accounting and data analytics intern, and I was a project manager intern. All of these jobs paid well and were flexible with my schedule.
Start a Side Hustle
The second and more entrepreneurial option is to start a side hustle. There are plenty of resources on the best side hustles for college students, including my own articles, so I won’t go into too much detail here.
A side hustle can be anything from flipping old furniture (which I do) to starting a blog (which I obviously already do). The options are endless, and side hustles give you the freedom to work as hard as you want. The harder you work, the more money you make.
I have a friend who teaches guitar lessons and can make $50-$60 an hour from that. Needless to say, starting a side hustle as a college student can also lead to a potentially profitable business down the road.
If you’re ambitious and entrepreneurial then starting a side hustle is going to be the best way for you to earn.
Freelance
Like a side hustle, freelancing is a great way to earn income while managing your own schedule. Freelancing can be done from anywhere and can generate a lot of money if you put in the work.
If you are talented at graphic design, social media management, or digital marketing, you can sell your services on places like Fiverr or Upwork. Not only is this a great way of making money, but it can also be a great resume builder.
If you’re passionate about something, freelancing might be a great way for you to pursue that passion. The earning potential is high, and the opportunities are limitless.
Improve Your Net Worth: Step 2 – Save
If you are earning some money, then the next natural step is to save that money. After all, if you spend all your hard-earned income then you aren’t really lowering debt and increasing your net worth. So instead of buying that new toy or trying to stay up with the stylish trends at your university, save your money and watch as your life slowly gets better than all your fellow students.
There are two ways to save money as a college student. One way is by keeping your expenses steady and increasing your income. The other way is by reducing your expenses. I have a whole article about saving up money as a college student that you should definitely read here.
In short, as a college student you are uniquely positioned to earn scholarships, be a resident assistant, or get research stipends. All of these things are not possible as you get older and move into the workforce, so you should take advantage of them while you can.
Saving money is crucial for paying for college and building your net worth. No one built their net worth without first saving.
Improve Your Net Worth: Step 3 – Invest
It’s only natural to ask what to do with your saved money. If you have already paid off your debts and built an emergency fund, then the best thing your money can do is go to work for you. By that I mean that you should invest your money so that it makes more money.
Money sitting in a savings account doesn’t do you much good. In fact, it slowly begins to lose value over time. That $10,000 in savings won’t be worth that much in 10 years if it’s just sitting there. So how do we solve this problem? We invest our money.
Investing is the only way to build wealth over time. Regardless of the vehicle you use, e.g. real estate, stocks, private businesses, bonds, crypto, etc. it all boils down to putting your money into an asset that appreciates over time. At its most basic level investing is simple. You throw money into something, and you get more money back.
There are whole books, websites, courses, and jobs that are built around investing. A large percentage of all billionaires operate in the financial markets, and every wealthy individual invests. I am not going to get in the weeds about investing, but if that’s something you’d like me to do then drop a comment or fill out my survey to let me know what topics you want me to write about.
Let’s leave it on a plain and simple note. Don’t overcomplicate. Do some research and start investing today. There is no better time to invest than now. Time in the market is more important than timing the market.
Putting it All Together
Now that we know the average college student net worth and how to improve it. You have a certified blueprint to increase your net worth as an ambitious college student. Broken into its simplest terms, all you have to do is earn, save, and invest.
I applaud you for making it this far, and if you did, I know you are going to go out and make yourself a high-net-worth student. After all these are the things that I did to graduate debt free and save over $35k by 22.
I hope this article helped you, the same way it has helped me. You aren’t an average college student so don’t have an average college student net worth. Go build something bigger and better.
Until the next article.
**Hi, I am your author Ryan Lisota, and I am on a journey to educate students of all ages. I am young, just like you and I have a goal to be on Forbes 30 before 30. Help me make that dream come true by reading another article here or subscribing to my newsletter here.**
Thank you!
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