Staying on top of finances is highly challenging as a student. There is so much to take care of: tuition, rent, textbooks, and day-to-day spending, all of which can cause a lot of stress. And for lots of students out there, this is their first experience living independently, making finances even more challenging to work through. With so many expenses and so little income, it becomes incredibly easy to fall into the trap of overspending and debt. But don’t worry – with some thoughtful planning and smart decisions, you can achieve financial independence while in college and even after you graduate.
Establishing a Realistic Budget: Tracking Sources of Revenue and Spending
As a student, the first step to overcoming financial hurdles is establishing a budget plan, which is just as a detailed plan for your funds. A budget is best described as a goal-oriented plan for your finances, which tells you how your wealth will be used. To properly make one, list every source you receive money from, including allowances and part-time jobs. Next, list all of your costs such as rent, fuel, food, etc. Remember to note every dollar, no matter how small, since even the little things add up.
By doing this, you will have a better idea of your spending habits and what you can economically conserve on. Make sure you keep track of your income and expenses using a basic notebook or spreadsheet. The key is to maintain a balance between your income and expenses.
Understanding Needs and Wants
As a student, one of the more difficult things you may face while budgeting is understanding how to separate needs from wants. Needs are essentials that must be paid for, such as rent, bills, and sometimes textbooks, whereas spending money, dining out, new clothes, or any online shopping are all categorized as wants that are not necessary. While these expenses are crucial, ensure that when you create your budget, you allocate the appropriate amount to needs while reserving some for your wants. This doesn’t mean you should never treat yourself, but doing so needs to be reasonable. Ask yourself: “Does this cost come from my needs or wants?” Making sure to practice mindful spending will not only help you stay on top financially but will also keep you out of debt.
Finding Student Promotions
As a student, there are many benefits available to you. One of the most popular benefits is the wide variety of student discounts offered for so many different products. Various stores, restaurants, transportation companies, and even software businesses provide special rates catered towards students.
To begin with, make sure you have a valid student ID, or means to access UNiDAYS. Make sure to look for opportunities to stretch your dollar further through grocery coupons or even some programs that offer discounts. Academic discounts are equally important in cases of purchasing software, textbooks, and even certain types of access to online classes. While these discounts may seem insignificant, you would be surprised the amount you save over time.
Using Apps or Other Tools for Budgeting
When it comes to managing finances and budgeting, technology is your best friend. Budgeting apps such as Mint, PocketGuard, or YNAB (You Need A Budget) let you keep track of your earnings and spending with ease. These apps often allow you to set spending limits, receive alerts for overspending, or even assess your overall financial health. Some of them even automatically categorize your spending which helps to deal with problem areas. With proper budgeting tools, you can remain organized and disciplined without much effort.
Taking Up Some Freelance Work or a Part-time Job
This is where part time jobs or freelance work becomes really useful and your life feels a little easier.
Part-time jobs in cafes, administrative offices, and libraries are available on many campuses which some students use as a means to earn extra money while studying. Graphic designing, writing, and tutoring are other freelance opportunities that are more flexible and available on one’s own time. The extra money can help cover additional expenses or even go towards savings. Always remember, though, do not go too far out of your way to earn more money, always prioritize your education.
Lifespan of a Student Loan: Run Away from the Debt Wisely
Always discipline yourself when it comes to student loans, virtually any funding you need for your schooling should be balanced out with responsibility. Always put loans in the category of a future investment, responsibility, so only consider them as money when a bill has to be paid. Spend funds only on necessities, never give into temptation. You should always begin with the basic; try to understand the loan’s term, try break it down into understandable segments like repayment plan, interest rate etc. For some people, beginning with small loans during studies may help lessen the burden of debt down the line. Don’t forget, when out of college these loans may be able to be consolidated or simplified using income-driven repayment plans.
Building on Financial Awareness Put Us in a Better Situation
While in school, learning how to manage money is crucial and creates the groundwork for whichever path is chosen, financial or otherwise.
Cultivate the habits of saving a certain percentage of any income, delaying gratification on unnecessary purchases, and settling bills within the deadline. Although these practices appear to be trivial, they build a strong financial psyche over time. Furthermore, broaden your knowledge of personal finance by immersing yourself in books, podcasts, or even online courses. Your knowledge translates to good decision making. Keep in mind that budgeting is a skill, and as with any skill, it improves as you gain experience.
Expenses that can be predicted are often easy to plan for, but there’s always the reality of the unknown; this is why having an emergency fund is important. An emergency fund is a small set amount of money saved up for unexpected expenses, like a medical bill or a damaged car. Set realistic goals, start with something manageable like $500, and then gradually build upwards. These savings should be put into a different, easy to use savings account, and shouldn’t be touched aside from dire situations. With knowing you have some financial cushioning to fall back on brings a piece of mind.
Take hold of your finances and become good at money management saving as a student isn’t straightforward, but with the right motivation and tools it is completely achievable.
A precise budget that separates needs from wants, measures tools, applies opportunities, and takes discounts is essential for controlling your finances. Additionally, remember these habits will help in your student life and throughout your life. Stay consistent, start with small habits, and watch your financial confidence increase.
FAQ
Q1. Is it worth saving money as a student, considering the limited income?
Absolutely! Saving even 5 to 10 percent of your income makes a difference over time. Such small contributions add up with time and provide a financial cushion for emergencies or goals.
Q2. Are budgeting applications free?
Many budgeting applications have free versions that have limited features. However, users may have to pay a subscription fee for more advanced tools such as financial analyst features or personalized insights.
Q3. What is the most effective approach for cutting student expenses?
The best approach is to distinguish between needs and wants, set limits, and hunt for the essential purchase discounts or deals.
Q4. Should students consider having a part-time job while attending school?
Yes, but make sure to strike a balance. When working, be sure that you are not compromising your studies or compromising your health.
Q5. As a student how do I manage my credit cards?
Restrict your credit card use to only what is needed, then pay the bill in full before the end of each month to avoid accumulating interest and debt.
