Managing your money is a fairly adult skill. It’s something that many people only really tackle when they join the world of work, so it can be tough for students to make the right decisions. Unfortunately, making the wrong decisions at this time in your life could lead to a lot of stress and heartache later on. Here’s how to be responsible with your finances even while you study.
Know your budget
The first skill you absolutely need in order to manage your finances is to be able to put together a budget. It’s fairly simple to do, but you may need a calculator and a piece of paper to work it out. There are two ways to do it: you can either work out how much you usually spend and then try to earn that much money, or you can work out how much money you have and tailor your spending to that.
As a student, you may have income from loans or a part-time job, so it’s best to start there. How much money do you have for the next year, including your projected earnings? Divide this by 12 and you have a monthly budget. Check your current outgoings, and if you’re spending less than that per month already, you’re good to continue. If you’re spending more, something has to change.
Start a savings account
If you’re in a position where you have extra money left over at the end of the month, or you manage to get there through hard work and cutbacks, it can feel tempting to go wild with that money. Instead, take at least half of it and put it into a savings account. Interest rates can really help your funds to stack up, and when you need the money after you graduate, you’ll be grateful you did it. If you have loans to pay off, you’ll be in a good place if the interest on your savings cancels out the interest on your loans!
Try to stop yourself from dipping into your savings except in absolute emergency situations, like having to go to the hospital or fix your car. Don’t use it for going out and partying, no matter how tempting it may feel when everyone else is buying drinks!
The only real way to get more money is by spending it. There’s a lot of ways you can invest in your future. Buying a nice suit for a little more than you would usually spend could transform that job interview and land you a graduate position. You can spend a little to do extra night courses, or take extra classes at school, which will make you more qualified than your peers. But the best investments are those that directly pay out to you.
If you learn how to trade online, you can do it in your spare time between lectures and exams. It’s a good way to get started with a small investment, which you can gradually grow. Paying off your loans early can often save you a huge amount of money, and even if you don’t make that much from trading, you can still use it as a bit of pocket money. That’s something you can go and have fun with, like students are supposed to! Anything extra can go into your savings account so you never lose the earnings on your investments.
Managing your finances is absolutely essential if you want to secure your future. So many adults have student loans and poor financial decisions hanging over their heads – don’t let yourself become one of them.