Often college students do not think long term about managing their finances so it is important they become knowledgeable on financial literacy during this early stage of their life. Most students would not expect that your finances in college such as, paying bills or rent late will impact them, but they affect their future finances and credit. It is crucial that college students and young professionals gain expertise in this area as early as possible so they can set themselves up for a financially stable future. Using the tips below will be a great guide to start handling your finances.
As college students’ we all incur various expenses from tuition and books to personal costs. I think it is important to set a budget and make sure that we stay on top of our finances to ensure we know what we are spending. One way I would budget is by making a list of expenses for the month in an Excel sheet. You should allocate how much money you will spend on each expense and then track your spending throughout the month. It is important to update your Excel sheet with how much you spend for each item to make sure you are not exceeding your budget.
2. Needs over wants
We all have that time where we want to make an impulse purchase or go out to dinner with our friends, but it is necessary to assess needs over wants. You must ensure your needs are being met before you have money for wants. For example, you should make sure you have enough money for the essentials such as rent, gas, food, and anything related to school before you purchase those new shoes you’ve been wanting. We must make our priorities in our life important in our budget because if we do not then we will overspend. Overspending results in not have having enough money to save, which can be detrimental down the road and after college.
Many college students take out thousands of dollars in loans per year depending on the university they attend. It is critical to keep that into account especially when saving. I always suggest to save 15-20% of your paycheck depending on the amount. This way you can be certain that you are establishing a savings for yourself. Depending on your financial situation some people should keep a savings for after college and a savings to pay back their loans or for emergency expenses. It is always important to save your money and to remember once you put it in your savings it should stay there and not be spent.
4. Treat yourself
At the end of the day we all work very hard as college students to manage our school work, jobs or internships so I think it is important to treat yourself on occasion. The most important thing with treating yourself is to make sure you do not go overboard. For example, you must make sure your treat yourself day will not affect your budget drastically, so I would suggest waiting to treat yourself at the end of the month. This way everything within your budget is paid for and you will not feel pressured at the end of the month to pay for your necessary expenses.