Picture this, you finished high school, and now you got accepted into college. Good news, right? You meet all these new and interesting people, with different backgrounds and stories to tell. Maybe you even go out all the time, making full use of that newfound freedom you’ve now obtained.
But the thing is, nobody knows that you have that looming presence that follows you everywhere you go. The student loans you took out, the feeling of uncertainty for what life has you in the future, and maybe even that hazy feeling you have when someone asks what your plans are after you graduate.
Being young and moving to a new place is great, it holds that certain je ne sais quoi that seems to pull everyone in. Especially when finance is not an issue, it feels like the world is at your feet.
While the main focus of college is, of course, experiencing college life to the fullest and maybe studying a bit, it also provides a great opportunity to develop the money skills you’ll need after you graduate. And I have just the tips for how you, as a student, can manage your finances.
1. Set a Budget
Let’s start with the simplest of all, setting a budget. Now, I know sitting down and creating a budget plan after hours of classes and tests and pending assignments seems like extra work, but trust me, as a college student myself, budgeting really works.
What I do is divide my money into three. From there, I only spend one part of the divided amount, and the other two parts, I save and let it stay in my bank account. As long as I don’t go over the limit I set for myself, I’m good to go.
Think about expenses for food, toiletries, supplies and put all those into your monthly budget. You can also opt to walk if wherever you’re going is close enough, not only are you saving money, you’re also sneaking in your daily exercise and reducing your carbon footprint at the same time. That way you can cut down the expenses for transport and have more space in your budget.
2. Track Your Expenses
Okay, you have a budget, now what? It’s time to track your expenses. Budgeting would only work if you keep track of what you’re spending on. From there, you can make cuts if you notice a lot of your money has been going to unnecessary things.
Creating a budget is one thing, but following it through till the end? That takes a lot of work and discipline. I’m not going to say that I have never gone overboard with my spending, because that would just be a straight up lie.
There are times where I myself have definitely spent more than I could afford to. And that was because I didn’t have anything to remind me how much money I have left to spend.
Personally, I find using budgeting apps help the most. As cliché as this is going to sound, they really are just a click away. Experiment with different apps to find out which one suits you the most, or just check out this list here. The other way of tracking your expenses is by doing it manually. I mean, you could, but are you really going to?
I like to make things easier for myself, so I made use of my phone, for once, and installed a budgeting app to help me. I would key in my monthly income, which includes my allowance and also pocket money from my parents, because why not, and also any expenses, and yes, that includes that 1 A.M. impulsive purchase you made on Shopee.
3. Start Building Your Credit Score
It might not seem important right now to worry about your credit score, but this is meant to be focused on improving your future.
You’ll need it down the road if you want to finance a car, buy a house or qualify for the best credit card offers. Your credit can even affect your job prospects and your ability to rent an apartment.
So for those of you who don’t know what a credit score is, don’t worry, I didn’t either.
So basically, a credit score is a number between 300–850 that depicts a consumer’s creditworthiness and the higher the score, the better a borrower looks to potential lenders. It’s based on credit history, meaning the number of open accounts, total levels of debt, repayment history, and other factors.
I know we grew up hearing that credit cards are the villain of the show, but when you think about it, it all comes down to how we choose to spend our “borrowed” money.
One strategy that seems to work is pretending that your credit card is actually a debit card and all that money you spend is coming straight out of your bank account. That way you will only make small purchases and can regularly pay the balance in full, avoiding high interest charges and get that boost on your credit score simultaneously.
Even so, you can still have fun and live your college life however you want. These are just things I wish I did earlier. Imagine the amount of money I would have racked by now if only I wasn’t eating out every Friday with my friends. These habits should be started as soon as possible if you’re aiming for stability in your future.
Discussion about this post