Basic Financial Planning for College Students
College is a life-changing and exciting experience for most students. It is the place where we work towards getting a life we always dream of and creating lifelong memories. It can also be challenging for many as we have to move away from family, make our own decisions and live on our terms. The new responsibilities and change can be stressful, and the last thing you need to worry about is your finances. Here are some tips for essential financial planning:
Create a budget
A budget is a financial plan for a defined period. To make a budget calculate your net income, list your fixed expenses, such as rent, utilities, food, transportation and variable expenses like clothing and entertainment. A good rule to make a budget is to spend 50% on needs, 30% on wants, and 20% on savings. Microsoft Excel is a fantastic way to make a budget.
Use coupons and discounts
It is always a clever idea to save money, and why pay the total price when you get it for a lower price? Discounts are available for most variable expenses like clothing, entertainment, groceries, and food. Some websites and applications offer coupons and deals like honey or Groupon. You can add honey to your web browser, and it will automatically apply coupons for you at checkout. Furthermore, it is always a good idea to ask fast food restaurants if there are discounts for students.
Avoid overspending
Here are some ways which can help you to save some extra money:
- Shop with a list
- Keep a check on spending habits
- Know what triggers your spending
- Limit the number of times you eat out monthly
- It is always a good idea to avoid impulse purchases
Build up credit history
Good credit plays a crucial role in your financial life. It shows the lender that they can trust you and help you get a mortgage for your first home, car, and even telephone service. If you have bad credit, you might be able to get a loan but with a higher interest rate, which can lose you a lot of money in the long term. It is a good idea to pay the amount you owe to the lender in full every month, and if your budget is tight, pay the minimum payment to avoid interest charges. Also, choose companies that charge lower fees and give you cash back when you spend the money. Furthermore, try to avoid saving your credit card online, which can help you keep a check on purchases. If it is hard for you to keep track of your spending, check out this free tool NerdWallet.
Find part-time work
Having a stable cash flow helps you pay off debts quicker and save up some extra money. Furthermore, it also allows you to network, get a break from school and manage your time better. However, sometimes it can be hard to go to work during exams, so it is always good to set aside funds so that you don’t have to touch your savings for variable expenses.
I hope the above tips will help you save money for the future. Whether you are taking an accounting program or a health information management program, these tips will prove helpful for your ongoing financial health.
