We hear of instances when students make frantic calls to their parents because they may have misplaced something. or wants to buy a new jacket, or eat at their favorite restaurant but their credit card limit has been maxed. These are unforeseen expenses many families fail to account for. The nearest relative who might be living a few miles away or even in another state, cannot be much of a help. While it is difficult to preempt these unfavorable incidences, it is always wise to maintain a buffer.
Financial literacy is an important skill that helps teenagers manage money wisely. It is important for them to start early so that they set financial goals, and know how to work toward a secure future. Learning how to manage money smartly now sets you up for a life or a social life of financial well-being. Saving money and spending it wisely as per a budget goes a long way in creating mindful spenders. Moreover controlling impulse buying and differentiating between wants and needs is crucial to being a financially prudent person.
Here are some strategies to help college students manage their finances wisely:
1. Make a Budget
- Create a tracker by listing all the sources of income and the expenses you incur in a month. (Allowance from parents, money earned from part-time jobs, scholarships, etc).
- Keep aside money for food, transportation, and leisure.
- Prioritize spending on necessities like tuition, rent, groceries, and books.
2. Avoid being in debt
- If you have a credit card, use it for essential purchases only and pay off the balance in full each month to avoid interest charges. Avoid getting into the habit of borrowing. Use student loans for education-related expenses and borrow only what you need.
3. Make saving a habit
- Every penny counts. Having the habit of saving money will cover Even if it’s a small amount, make a habit of saving regularly. This can be for emergencies, future expenses, or long-term goals. Unexpected expenses, like medical bills, or the loss of a valuable item can be funded with this money.
- Use Public transport wherever possible to save money.
- Continuously search for scholarships and grants, even after your first year.
As you grow, you will realize the importance of imbibing good financial habits from an early age. When you start getting pocket money in school, you should start investing small amounts which will grow in some years. A habit started early will go a long way in creating a strong foundation for your financial well-being.
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