Personal Finance Tips for College Students
By Vaidehi Bulusu, Press & Written Media Team
Managing your finances is an extremely important life skill. College is an ideal time to start learning this skill, as you’ll be independent for probably the first time in your life, and therefore will have to handle things on your own. Here are our top five tips to help you get started with personal finance management!
Take up a job
It’s a good idea to take up a part-time job in college (of course, this may not be optional for some students), if you are able to juggle it with your other responsibilities and commitments in college, such as academics, extracurriculars or maintaining a social life. A part-time job will allow you to earn income and gain work experience, which is valuable even if it’s not directly related to the field you are studying. Managing your earnings — including setting a portion aside as savings, paying taxes, etc. — is a crucial aspect of personal finance.
Start saving a portion of your income
There are a lot of things you’d have to spend on as a college student, including necessities such as groceries and furniture. You may even want to treat yourself every once in a while. However, it’s also extremely important to save a portion of your income to ensure that you have enough funds in the case of an emergency. You can also save towards a huge expense you think you may have in the future, like studying abroad or grad school. Another great thing about saving your income is that you can even earn interest on it!
Keep a budget to keep your spending in check
This is one of the more basic personal finance tips, but it’s crucial to emphasize. A budget serves as a guide for your spending. Planning how much you’re going to spend on different things such as groceries and entertainment ahead of time allows you to avoid overspending so that you have enough left to save. You could create a weekly or monthly budget. There are lots of ways to create a budget, including using online trackers like PocketGuard, spreadsheet software like Excel or Google or pen and paper.
Learn about investing
Investing — specifically, investing in the stock market — is a great way to grow your money over time, and the earlier you start, the better. Before investing, it is important to educate yourself about it through resources like books and online courses. Invested by Danielle and Phil Town is a great book that covers investing in the stock market in depth. It is intended for beginners and also talks about non-technical things like facing your fear of investing and ethical investing. You can also learn about passive investing (e.g. investing in mutual and index funds).
Plan to pay off any debts
If you’re fortunate enough to graduate college debt-free, good for you! However, if you’re not in this club, you need to create a plan to pay off your debt. You can start by thinking about what portion of your income you need to set aside — either while you’re in college or after you’ve graduated — towards paying off your debt.
Managing your finances on your own can be intimidating, but you’ll get better at it over time and may even learn to like it!
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