Feel like you’re broke all the time? Here’s how you can change that

College students are not used to having money so they spend it more than save it.

College students need to save money now. You don't have to wait until you are established in your adult life to have emergencies and unexpected expenses. They can happen at any time. The sooner you start saving and investing your money, the more you will have. Who doesn't want more money?

You need to know how to invest money if you love it or hate it. It dictates a lot of the choices you make, from where you live to what you buy. It's important to start knowing the basics when you're still in college because no one is saying you have to become an expert.

College Money 101 is an easy guide to help college students set up their first budget.

The best time to invest is yesterday. The second best time is now.

The earlier you start, the earlier your money grows. This is done with compound interest. The money that you will be making when investing will be based on the previous earnings. It's what people mean when they say make your money work for you.

Let's say you invest $1,000 in a stock and it goes up 5%. Your investment is worth more than $1,000. Let's say you make 5% next year. 5% of $1,060 is $53. If you make 5% next year, you will make $1,113, which is $56. The original $1,000 is now worth $1,170. Imagine that over a long period of time. It adds up. You are letting money slip away by not investing right now.

A lot of people already know what to do with money, but they may not know how to grow it.

When you get around to it, it's not enough to just try to save. You need to make a habit of saving and keep it going.

The 50-30-20 rule is a simple way to do it. 50% of your income goes to necessities, 30% goes to wants and 20% goes to savings.

If you aren't able to save in this ratio while you are a college student, that's fine.

When I was in med school, I spent most of my money on needs. I knew I would be able to use the rules of thumbs with a grain of salt since it didn't fit my situation.

It's important that you start saving money. Whatever you can get for a month.

The sooner you reach financial flexibility, the more you save.

You will be able to afford more of the things you want if you are prepared for emergencies.

Automating it helps. Set it and forget it. You will be surprised how fast it grows if you set up an automatic transfer of a set amount each month. If you can increase what you are saving, then you should check in with yourself regularly. It will add up even if you only increase it a few times a year.

If you don't have a lot of money to invest, it's important to split your savings into two separate buckets.

Liquid savings is money that can be accessed anytime. It's like your checking and savings accounts. This is for your day-to-day cash, but also unexpected costs that may come up. You need to be able to pay someone with a payment app.

What is the opposite of this? It is called illiquid assets and it is the type of money that you can't easily access. This includes your stock portfolio, even shoes you're trying to flip for a profit online. There are penalties for withdrawing too early if there is a fixed date on the investment.

Why do you want money so quickly? It tends to generate a higher rate of return than a checking account. Both are important to have.

If you don't have any savings, the most important thing to do is to figure out how much money your bills are every month and then put it in a savings account or financial app. If your monthly bills reach $2,000, you need at least $6,000 in an account that you can access anytime. Set a goal and work hard to get there. Figure out where you can save more money.

One needs an emergency fund to be able to breathe in case something goes wrong.

Keeping your expenses consistent is my best tip. The expression "life is a marathon, not a sprint" applies to your money as well. The long term is the big picture. You will have a few anomalies, such as buying a new phone or laptop, but keep your spending consistent. Discipline is the only word that comes to mind.

Dominic Wash, a junior at Michigan State studying psychology.

Dominic Wash, a psychology student at Michigan State University, said paying rent isn't that hard.

I have spent more on food than I have on rent.

It's important to think about how long something will last and how much you'll spend on it.

I think about the long-term benefits when I shop. I don't like fast fashion. All the time, with groceries and frozen food. I try to figure out how much more I can stretch it out when I return home.

Erin Yi, a senior at the University of Michigan studying biopsychology, cognition, & neuroscience.

By actively seeking out the opportunities to save money, you prepare yourself for longevity, building up funds that can be used for better use. This doesn't mean that you can't treat yourself occasionally. It's important to be proactive, keeping in mind how your decisions will affect your future, but you can always go out and eat and shop.

You can use an investment account or app to get some of your money growing after you set up a savings account.

Stephen Engel, a senior private wealth advisor at Palumbo Wealth Management, said that the best way to set up a self-directed stock account is to set up automatic contributions.

Start early, then learn.

When you get your first full-time job, most of them will offer a 401(k) retirement plan with a matching contribution from your employer. You can put your earnings into an account where untaxed money goes in, grows in the account, and then gets taxed later on when you withdraw it in retirement. If you move to a new job, you can put that into an individual retirement account. There are tax benefits to investing in a Roth IRA, where there is a contribution limit. The difference between the 401(k) and the IRA is that the IRA allows you to invest earned income that has already been taxed. You can put your earned income into stocks and grow it through compound interest.

Think big picture.

Online research is the best way to start learning about investing. You don't have to spend hours studying just read an article. Over time, that little bit of information gained will grow.

Don't be afraid to make mistakes. It can be nerve-racking to be ignorant at the cost of your own money, but with the right amount of knowledge and common sense, you will learn to manage those risks with your finances as well. Don't invest a lot of money in one place until you learn a lot. It is smart to have your money invested in a wide variety of things. It doesn't take your whole life savings if one investment falls.

Establishing your financial history and trustworthiness with credit cards is a necessity. It shows that you are trustworthy when you use a credit card to pay your bill on time every month. When you rent your first apartment, buy your first car, or buy your first house, you'll get a credit score based on that, and it will be something that your creditor looks at throughout your life.

It will be difficult to buy a house without a record if you never had a credit card. If you set up a credit card with a limit of $10,000, you'll have to pay interest on it.

According to a recent Credit Card Landscape Report, the average credit card interest rate is 18.32%.

Credit cards charge an annual percentage rate, so on $10,000, that's $1,832! A portion of that is charged each month on your bill. But! That isn't it. How did we talk about compound interest? How can that help you save, invest and grow your money? If you carry a balance, it will work against you. It will be a lot harder to dig out of that cycle if you carry a balance month after month. Don't carry a credit card balance and start good habits early.

Discipline.

One of the great things about graduating and starting your adult life is that you can make your own decisions. That also includes your money. You have to be smart about it. You don't want to be in a situation where you have to pay rent by midnight and you don't know where the money is coming from. Make sure you have a balance of liquid and illiquid assets in order to take care of your life expenses now and your paradise in the future.

College Money 101 is a guide written by college students to help the class of 2022, from student loans to budgeting and getting their first apartment, learn about big money issues they will face in life. Even if you are still in school, you can start using this guide now so you are financially savvy when you graduate and start your adult life on a great financial track. Jacob Shin is a senior at the University of Michigan. He is an intern at CNBC. Cindy Perman edits the guide.

Money 101 is an eight-week course on financial freedom that is delivered weekly to your inbox. Click here for the Spanish version.

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