In this day and age, students all over the world are blessed with the opportunity to study at countless prestigious universities of their choosing to pursue their dreams. With many different courses offered, and plenty of skilled academics to guide them, students are thought to be well on their way to become the successful white-collar workers they were meant to be, making hundreds or even thousands by the hour. This could all be a reality, until before they know it, they become PENNILESS.
How does this happen? Some students are slightly more frugal as they don’t have the luxury of income to go crazy and splurge, whereas the others, for as long as mum and dad keeps sending them that monthly allowance, they continue to live lavishly and spend without a care in the world. Of course if your parents are multimillionaires then this would not be an issue, but know that without a solid financial plan, even the richest of the richest would eventually, become poor.
Financial planning is not only for the rich, it is for everyone. While it might be tempting to live life young, wild, and free, students should start learning how to manage their finances at an early age so that they don’t become strapped for cash later on in life, so here are some tips for you students out there to start building a better and healthier financial life.
1. Start budgeting
This may well be the very first thing you’ll hear or read anywhere when you look up financial management on the internet. Although many students would tremble at the mention of this word, budgeting is definitely the most important rule of financial management.
Financial success is being aware of how you’re spending your money and that cannot happen without a budget. A budget is simply a plan of how you will spend your money each month by making a list of your fixed expenses such as rent, books, food, car payments and utilities.
Next, make a list of your optional expenses such as clothing and entertainment. Add these two together, then subtract that from your income to make a basic budget. A budgeting app can also help you keep track of your purchases. Through this, you have a record of where all your money disappears.
2. Live within your means
Ask yourself, do I really need the new iPhone XS Max or should I just continue to make use of this perfectly fine iPhone 7? Do I really need to go to that party and end up spending hundreds or should I just stay home and enjoy my own company? Should I really eat out at that fancy restaurant or should I just cook my own food at home tonight? By doing this, you will be able to identify your needs from wants and figure out which one you should prioritize more.
Before you start spending on frivolous items make sure that you are meeting your financial obligations. Always keep in mind that you don’t have to live the high life in order to enjoy the university experience. If there ever was a time in your life when it’s alright to be frugal and stingy, it is definitely now. Your future self will thank you later.
3. Don’t make impulse purchases
We all know how tempting and easy it is to click ‘add to cart’. It wouldn’t hurt to add just this one dress right? Or two? Or maybe three? Don’t give in to your temptations. You don’t need another black dress or another pair of sneakers. You already have five of those that you’ve never worn, hidden away in that dusty closet.
When you see something you want, which you know deep down, you don’t need, divert your attention elsewhere or simply, ESCAPE.
4. Go crazy on student discounts
You won’t be a student forever. So while you still have the chance, grab every student discount your youthful hands can get on, as this will save you a ton of money. There are countless perks of being a student, from restaurant discounts, cheaper gym memberships, to huge chunks off the price tag of that new laptop you need for class. Just use that student ID and wave it around proud like you just don’t care.
5. Eat in not out
If only we had saved up all the money we’ve ever spent on eating out, we would all be rich by now. How many of us are already broke in the middle of the month because most of our money goes to food? Before heading out, always think twice. If you have groceries at home then opt to cook instead.
We all know this takes more time and energy but if you plan your meals and not eat out as frequently, you would not be complaining about being broke every other week. It would also help to split the cost of groceries between your friends and take turns making dinner, this way you get to save money and also spend quality time with them at home.
6. Cut out useless expenditures
Smoking and binge drinking are activities that you should definitely not indulge yourself in if you are trying to save money. It is pointless and not to mention expensive, especially for students. So while your health is still at its peak and you still have the time to put an end to these habits, DO IT. You will save a great deal of money and at the same time, cancer won’t be one of your worries.
7. Sell what you no longer use or need
One of the easiest ways to make some easy money is by selling all your unused items. There are plenty of stores, applications and web sites, where you can sell used accessories, clothing, furniture, books or gadgets. You will be surprised to see how sought-after your second-hand items are, as everybody is constantly looking for a good deal. Besides that, try to avoid buying branded items and opt for generic items instead, whenever possible. This can definitely save you a LOT of money.
All in all, if you learn to treat your finances as if your life depended on it (which it sadly does), then you will certainly be better prepared for the future. It is never too soon or too late to start saving for an emergency fund. Just remember that the sooner you begin saving up, the more time it has to grow. As Will Rogers said, “The quickest way to double your money is to fold it in half and put it in your back pocket”.