Increasing competition in the job market has led many students to wonder what they can do to meet their personal financial goals in the future.

Both saving and investing appear to be attractive options, but many students are perplexed as to when and how to initiate the process.

"The human capital you build up when you're 18 to 20 [years old] has a huge impact on your career and the rest of your life," said Andrew L. Holmes, associate professor of business management. "Every student is already saving."

Even though many students are currently pouring in hour after hour in their human capital fund, many are also interested in their current financial well-being.

"You have to know if you're dealing with long-term or short-term money," Holmes said.

Most BYU students are anxious to reach a financial position where they can begin long-term savings, he said.

"This is good and will bless their lives and the lives of people around them, but they have to understand the priority of money," Holmes said. He added you don't want to miss out on attending graduate school because you bought high and had to sell low.

Students should first save enough money to pay the living expenses of one month. This includes reducing what Holmes calls dumb debt such as high interest credit card debt and payday check loans.

Once students can make it from month to month, their next priority should be to create a short-term savings account that Holmes calls a rainy day fund.

"It's money that you don't plan on using but is available in a time of need, so that if your car's radiator goes out, it's not the end of the world," Holmes said.

This fund should hold three to four months of living expenses and savings for any large future expenses such as a down payment for a house or tuition for graduate school.

The rainy day fund should be invested in a low-growth savings account, such as a simple savings account in a bank. The rainy day fund is meant to cover inflation but not to add any real purchasing power.

Once students have set up a rainy day fund, students may want to look at starting to invest for more long-term savings.

"There's nothing flashy you can do with it," Holmes said about the relatively small amount of money the majority of college students have for such long-term savings.

However, this does not make such savings useless.

Holmes compared small savings and investments to his attending sacrament meeting each week with young children.

"I didn't hear a thing," Holmes said, "but I was building patterns in my life and the lives of my kids."

Another advocate for starting long-term savings as a student is Craig L. Israelsen, a BYU professor in the School of Family Life and professor of HFL 260 Family Finance.

"If the motivation is there, let's do something about it," Israelsen said.

When investing or saving money, one has to be investing or saving for something, Israelsen said. It makes no sense to be saving for the sole purpose of having more money.

Israelsen shared the story of one of his relatives who saved money while working on his farm in order to put his brother through college.

"He was saving for something," Israelsen said.

Israelsen cited retirement or the desire to later serve a mission with one's spouse as possible reasons or goals for long-term saving and investing.

Israelsen explained that when one saves money for a purpose, it becomes more than just temporally saving money. It becomes a spiritual process as the person is changed by the short-term sacrifices being made to accomplish their long-term goals.

"If there's no meaning, we're turning into robots," Israelsen said.

One option Israelsen suggests for long-term student investments is Homestead Funds, which allows its customers to invest small amounts of money each month or quarter into a mutual fund, depending on the account the customer creates..

Even though the amount may seem trivial, students are able to establish strong patterns of planning, saving, and making short-term sacrifices that can later pay large dividends.

"The amount is really irrelevant," Israelsen said. "You get the patterns established."

Money in the Homestead Funds can be invested in large and small U.S. stocks, bonds, and international stocks, according to the Homestead Funds Web site www.homesteadfunds.com.

According to Homestead's Web site the funds are no-load, which means that no sales commissions are charged.

"We keep a tight rein on fund expenses, and we keep our account minimums low so that everyone can afford to invest," states the Homestead Funds Web site.

Homestead requires monthly or quarterly contributions to be made to the fund. These contributions can be as little as $1, or much more.

Homestead allows its investors to contribute to a regular or Roth IRA. Contributions in a regular IRA are not taxed until withdrawn, with early withdrawals resulting in a penalty fee. Roth IRA contributions are taxed as one contributes money to the fund and can therefore be easily liquidated without the penalizing fee.

Although fees are incurred for withdrawing before a certain date, a regular IRA allows investors to have more money in the fund at a given time because it has not yet been taxed. This can make a large difference in value of the fund if the money is invested and allowed to grow for many years.

According to personalfinance.byu.edu, a well-planned budget is critical to successful investing and includes a percentage of income set aside for savings and investment.