For college students investing money is not often high on their list of priorities. For some, the investment they are making in their future through education consumes all their energy and resources.

However, if you are a college student who can put aside a small sum each month, do it–you will be thankful later. Learning how to invest and build an investment portfolio will serve you well throughout your life.

The steps below outline how you can realistically invest money while in college.

1. Open a savings account at your bank or student union

A savings account will pay you some interest and is a great place to keep funds until you have enough to take advantage of other investment opportunities.

2. Find ways to reduce your expenses so you’ll have money to invest

This is easier than many students realize. The basic idea is to set up a budget and then find out where you can eliminate things that don’t really serve much purpose. Decide how much money to invest and have your bank automatically transfer that sum to your savings account each month. Click on the Resources link below to find suggestions on how to reduce your expenses so you will have some money to invest while you are in college.

3. Explore your investment options.

You may want to set up an Individual Retirement Account that will provide a tax shelter for your investments. Don’t neglect to take advantage of where you are. On almost any college campus there are businesses schools with faculty who can help you learn about investing. Some universities have “Young Investor’s Clubs” composed of students who are already investing money while in college.

4. Learn how to research and select investments before you put your money into them

Whether you want to invest in a mutual fund, individual stocks, bonds, or any other financial instrument, you should know as much as possible about how that particular kind of investment works. Mutual funds are portfolios of stocks managed by professionals and you need to know the terms of service of a fund and what its record is over the previous five years.

For stock in an individual company, learn the company’s recent history, its current status, and its plans and future prospects. Bonds, especially municipal bonds that may have face values of $100, are good when your funds are limited, but find out if the municipality is well managed and fiscally sound.

5. Talk to your bank manager about student-oriented investment programs

Banks like to develop a relationship with customers when they are young because it’s a good bet a young person will stay with them for many years. Often, banks have savings and investment plans designed to help a young person get started investing with limited funds.

6. Consider starting a mutual fund investment program

Some mutual funds have low minimum requirements—as little as $500 to open an account, and you can add to your investment in increments of as little s $50. The advantage of mutual funds is you are buying shares in a diversified portfolio of stocks chosen and managed by a professional fund manager. This saves you the effort of researching each individual stock.

However, some mutual funds are good and others not so good, so you still need to get the fund’s prospectus, read it carefully, and learn about the fund’s performance. Choose a “no-load” fund. Some funds will charge you up to 8% of whatever money you invest in addition to fees. Good no-load funds don’t do this and have excellent earnings.

7. Open a brokerage account online if when you are ready to choose and invest in individual stocks

An online brokerage account with a reputable discount brokerage like Ameritrade lets you invest with low fees. Another option is an account with a firm like Sharebuilder.com (see the link below). In this type of investment you open an account with as little as $100 and add to it a little at a time. You choose particular stocks and as your investment grows, shares in that company are purchased and added to your portfolio.

Mitch Mustain | Elite.