By Chelsey Schweitzer

Staff Writer

More than one in four Americans don’t have money saved.

This statistic from CNN Money is made more concerning by the projected state of Social Security. To college students, retirement seems far in the future and many therefore don’t concern themselves with thoughts of saving.  This can be a mistake that has both long and short term consequences.

In the short term, not saving money can hurt in emergency situations. If a person found themselves in an unexpected situation, such as being laid off or being injured and unable to work, they would need to rely on what they had saved during this emergency period. However, according to CNN Money, “about 49% of Americans don’t have enough money saved to cover three months of expenses [in an emergency situation].”

In addition to this short term effect, there is the long term effect on retirement. According to FOX Business, “social security will be ‘insolvent’ by 2033.”  This doesn’t mean that social security is going to completely die off, but rather that “social security can only pay out in benefits… roughly 75% of the amount it will be obligated to pay.” Due to the fact that social security will not be able to fully support the current generation’s retirement, saving now is more important than ever.

Saving may seem like a daunting task at this point, especially with the strict college budget and the fact that many employers are paying with prepaid debit cards rather than paychecks. These prepaid debit cards are in widespread use in the country, with over 4.6 million active cards in use since 2012 according to the research firm Aite Group. These cards are making it easier to spend and harder to save, especially with the risk of hidden inactivity and withdraw fees.

With all of this stacked against the average college student, saving seems harder than ever. There are a few things that can be done to help with savings, however.  The primary way to save is to set aside some money here and there. Any little bit helps and this will set up a habit of savings that can be built upon when an actual career is found outside of college and more than the minimum wage is being earned.

In addition to small savings, look at the “latte factor.” In the book The Automatic Millionaire by David Bach, this concept shows how spending small amounts of money can lead up to a big total. Take for example, a daily cup of coffee. This is a staple to most college students, but at over two dollars for most cups of coffee and 7 days in a week, it results in $56 a month for the coffee.  If buying a cup a day was reduced to every two or three days and the rest of the time the coffee was made at home, that would save money that could then be put into savings instead of spent. This applies to many small items that most college students pay no attention to that can lead to large amounts of money slipping out of their hands.

Many cups of coffee cost more than seemingly-insignificant two dollars. The Cougar Chronicle decided to put Bach’s “latte factor” idea to the test on campus. A popular seasonal favorite, the pumpkin spice latte, costs $5.15 for a venti 20 fluid ounce at the campus Starbucks, and $4.00 for a 20 fluid ounce at Peerless Coffee on campus. If bought four days a week, pumpkin spiced lattes cost one $1,071.20 per year at Starbucks, and $832 per year at Peerless Coffee.

If one works approximately 50 years, or ages 18 to 68 for example and buys coffee 4 days of every week during that time,  coffee could cost one $53,560 over 50 years at Starbucks, and $41,600 in 50 years at Peerless Coffee. Most people won’t be shopping at the campus coffee houses for that long, and the favorite pumpkin spiced latte is not available all year, but non-campus coffeehouses often have similar prices and other flavors appeal during the less autumnal months.

This is not to say indulging in seasonal treats and coffee is to be avoided stringently. Some people rarely buy them. Other culprits might be cigarettes, trendy clothing that won’t be popular in a month, or snacks that could be bought cheaper in bulk. The idea Bach presents is to monitor the little ‘insignificant’ purchases one makes for a few days and then do the math to see how much these treats cost over a lifetime.

In addition to saving in a personal savings account, a 401(k) plan, typically through one’s work, is another option for saving for retirement.  Under this plan, a set amount of retirement savings are deducted automatically from each paycheck either before or after taxation. In addition, whatever price is agreed on being taken from the paycheck is often matched by most employers to a certain percentage, doubling the savings.

These small methods of saving money now can lead to financial security and less stress in the long run. With many questioning the future of social security and little people saving, college students find themselves in a place where they must anticipate emergencies and save small amounts of money. The question of who will provide for them later in life is one that many find unanswered.