Being a college student isn’t just a step forward into the world of higher studies. It brings in a whole lot of experiences that can’t be found anyplace else. When I first stepped out of the house to live the college life, I was completely overwhelmed with the changes that being a college student demanded out of me.
Right from deciding on where and how much to spend to actually paying off the expenses, Mom-Dad had it all sorted and there was nothing that we, as children, were required to worry about. But as college happened, I went all nervous with the realization that I would now have to do it all on my own. I wanted to save as much money as possible while being able to meet all my necessary expenses. Initially, I just couldn’t do it right. It took me days and months to learn the right way of managing my little money.
Here are some tips, right out of my own experience, to help you out with managing your finances the right way:
1. Identify the expenses and set out a budget – This should be the first thing for you to decide on as and when the money hits your bank account. Prepare a list of expenses that are required to be incurred and set out a budget for each of these expenses. My friends, Jeff and Ben, have an amazing post on their blog DollarSprout on how to make a budget that you can actually stick to. Be sure to check it out!
The primary expenses in your budget should include your rental needs, your monthly food budget, electricity and the daily commuting expenses. The secondary expenses should specify the amount you are willing to incur on entertainment (going out for a movie, eating out with friends, going out for a trip, etc.)Make sure that you move on to fulfilling your secondary expenses only when your primary expenses are met.
2. Limit eating out – Decide, for yourself, on the number of times you’re willing to eat out in a week. If your budget permits you to eat out twice a week, ensure that you stick to it. Frequently dining out often turns out to be very expensive thereby failing your entire monthly budget. Sometimes, during the course of enjoying your time out with friends, you end up spending more on food than you had expected to. You might have just planned a movie, but you stop by to grab a lunch and then a drink or two and within no time, a two-hour movie has turned out to be all heavy on your pocket.
3. Recognize small things you can save on – As a student, you are in a position to save on little things that may otherwise sum up to sway a large portion of your budget. Setting aside an hour or two every week for doing your laundry, instead of sending it out, can save you a lot in the long run. Selling your old books to buy the new ones, using a cheaper mode of transport for commuting on a daily basis, using online coupons while buying necessities are a few of the many little things you can save on to maintain your budget while being able to meet your necessary expenses.
4. Reduce impulse buying – You walk in to a mall to buy yourself a pair of jeans but a pretty dress catches your eye and you just can’t help buying it. You then move ahead to get matching shoes, matching earrings and by the time you arrive home, you realize that the same pair of jeans which was meant to cost you $40 has actually left you $150 short. Impulse buying is the first and the foremost spending habit that needs to be addressed if your funds are limited.
5. Small Savings – Save a small portion of money every month as a habit and to be safe with regard to your uncertain financial needs. Small savings over a period of time pay off in the long run as they make you stand on a sound financial footing right from your college days. Maintain a Students’ savings account specifically for your savings so as to keep your money safe.
6. Finding fun for free – Enjoying a great time with your pals doesn’t always has to come at a heavy cost. Opting for a home-cooked meal at your accommodation vs going out is equally fun and entertaining. Renting in a movie for some in-house entertainment while enjoying home-cooked meal isn’t just fun but also a way to save some big bucks. I’m sure we all have friends who are always in to save some money.
7. Always keep a track of your savings and expenses each month – At the end of the month, sit and compare the budget set out in the beginning with the actual expenses. This is important to know how adequately you have been able to manage your finances and to identify which all extravagances could have been ignored. Compare them, identify the reasons for differences and recognize if there could be a way for you to work them out the next month.
