STUDENTS should consider putting down the credit card applications and picking up some information on Individual Retirement Accounts. Why do students need to begin thinking about retirement before their parents even stop paying for their meal plans? The answer is simple. Although students may not have much money, they possess more of one asset right now than they ever will enjoy again ­— time.

The value of beginning to save and invest early cannot be overstated. Learning to set aside part of a paycheck, even if that amount is just 10 percent of earnings after taxes, will pay dividends in terms of financial discipline later in life. The decision to forgo current consumption in favor of investing as a young person also allows additional time for your investment to grow through compounding, the process by which interest earned on an investment adds to the principal and accrues further interest.

The obstacle facing most students who try to invest during college is a dearth of disposable income. Even if students are not responsible for paying tuition, the demands of food and drink easily can make a dent in the most frugal individual’s bank account. When you begin to save early, however, large long-term gains can be realized through even the smallest investments.

Students should consider placing their investments in an IRA. Traditional and Roth IRAs are special accounts sanctioned by the government to encourage individuals to save for their own retirement. These accounts allow individuals to invest in stocks, bonds and other financial instruments and have added benefits because of special taxation structures. While it is easy for IRAs to intimidate young investors, there are many useful and free online resources that can help students understand and open both traditional and Roth IRA accounts. Financial service companies such as Edward Jones, TD Ameritrade, Merrill Lynch and others all offer easy to understand outlines of traditional and Roth IRAs.

Although I am certainly no expert, I have found the best way to understand the basics of IRAs is to get a firm grasp of the implications of taxes within the IRA structure. Roth IRAs are investments that are derived from after-tax income, which means that money you pay into the account is included in your yearly taxable income. One of the key benefits of a Roth IRA rather than a traditional IRA is “you can also withdraw earnings tax and penalty free, as long as you have owned a Roth IRA for at least five years and have reached age 59 and a half,” according to Edward Jones. If you believe that taxes, and particularly capital gains taxes, will rise in the future, investing in a Roth IRA allows you to lock in today’s tax rate and receive the qualifying returns from your investment tax free.

Roth IRAs are probably the best investment account choice for students, as many students are in the lowest tax bracket and therefore pay very little in federal and state income tax. Thus, any money invested in a Roth IRA and the qualifying returns on the investment allow the student to carry forward the tax benefit of his low income on any investment made during that time.

This sounds like a deal too good to be true, but there are several stipulations. Only individuals making less than $122,000 a year can qualify for investment in a Roth IRA, and wealth cutoffs are similar for traditional IRAs. Unless he is a celebrity or the next Mark Zuckerberg, though, a University student would not have to concern himself with this stipulation.

If you intend to become very wealthy in the future, however, this is another reason you should start investing in a Roth IRA in college. Once you enter the top tax brackets, you will be barred from receiving the benefits of the Roth IRA. Also, be wary of an IRA’s investment limit. You cannot contribute more than $5,000 to a Roth or traditional IRA per year if you are younger than 50.

Although there is no such thing as the proverbial money tree, students who make the sacrifice to plant funds in a Roth IRA potentially will reap financial benefits for years to come. Learning to invest wisely is not easy, and this article just scratches the surface of the nuances of long-term investment. With a little luck and good timing, however, there is possibly a forest of market opportunities for the savvy young investor. Every forest, though, has to start with a seed.

Ginny Robinson’s column appears Wednesdays in The Cavalier Daily. She can be reached at g.robinson@cavalierdaily.com.