College is a very exciting time for students to step up in life and finally take responsibility. College responsibilities also include financial responsibilities and let’s be honest, it can be hard to deal with finances, especially when you are dealing with college loans already. Nonetheless, college is a great point to start building good financial habits and setting the right financial tone for the remainder of your life.
While you may want to check the difference between subsidized vs. unsubsidized student loans, you will also want to build good financial habits so that you can move forward to bigger goals in life. By assessing your saving and spending habits, you will also be capable of incorporating a workable budget and still enjoy life.
While the primary focus of the college is to get higher education, it also enables students to develop essential life skills, and money management skills are one of them. Not only will you start making smart life choices, but you will also lay a solid foundation for your future finances.
Read on to learn more about three financial management tips for college students.
Tip Number 1: Set up a Monthly/ Weekly Budget
No matter how hard it sounds, you should never neglect the importance of setting up a budget. We understand that making a monthly/ weekly budget can be quite energy and time-consuming; however, it will act as a financial life-saver.
A college student also benefits from managing personal finances as well. By creating a budget, you can efficiently track your spending habits and gain a better insight into the things you spend your money on. You will also identify the things you need to cut back on and the list of things that are parts of your monthly expenses, such as bills, rent, food, and transport.
Your budget will help you set your financial priorities and the amount of money that can be spent on your hobbies, travel, and food.
Tip Number 2: Keep Tabs on Your Spending Habits
Another way for effective financial management tips is to keep tabs on each dime that leaves your wallet or bank account. Daily assess what you have been spending money on and which money spending habits you can curb to save more money. By keeping tabs on every dime leaving your pocket, you will realize how much small things can add up to your weekly or monthly expenses.
While creating a budget is the first step towards financial management, sticking to the budget and keeping tabs on each penny is the path to financial freedom. You can find many apps that will help you with keeping tabs on your spending habits. If you prefer pen and paper, you can also keep a separate diary where you enter your daily expenditures.
Tip Number 3: Open a Saving Account
The earlier you start saving, the better it will be in the long run as you won’t have to struggle much with each passing year of your life. Initially, you might be tempted to spend money and save the leftovers on your savings account; however, by doing so, you will immensely reduce the amount that you can potentially save vs. the amount that you end up saving after reckless and unnecessary spending.
We recommend paying your mandatory bills first and then contributing the leftover money to your savings account. Only keep very little for yourself, and don’t fall into the temptation of spending first and saving a very little amount. You will have to think strategically and put your priorities before your temptations.
While setting aside money for your budget, savings account, and personal expenses, you may want to make slight adjustments, which will help you in the long run. For instance, you may want to switch an expensive restaurant meal for home-cooked cheap meals. Also, instead of spending money on the latest book editions, you may want to spend on pre-used textbooks instead.
You will be amazed to see how much you can save in the long run by making such small adjustments. You can also save immensely on fuel and transportation expenses by riding on a bike or using the designated campus transportation during your college years.
You may also want to incorporate an emergency fund where you keep the money for urgent situations, such as sudden illness, car repair, tuition fees, etc.
Like so many other things in life, budgeting, keeping tabs on each dime spent, and opening a savings account, you can learn a new skill, effective financial management skills. If you will struggle in the beginning and make a few mistakes, don’t worry, we all make mistakes in the beginning and even get at times over the budget. However, with practice and time, you will soon ace this healthy and long-term financial habit.