Management

7 Personal Finance Tips for Ambitious College Students

Easy-to-follow tips to help you better manage your finances.

Updated on

January 22, 2020

Budgeting — Stick to your budget as closely as possible. PHOTO | COURTESY

Going to college is an exciting time for students. It means moving away from home, living on your own and having the freedom to decide for yourself.

However, this freedom comes with lots of responsibilities including being in charge of your finances. And with student debt being a headache for many graduates, it is important to put smart spending plans in place to ensure that you graduate with minimal loans.

That said, here are seven financial tips for young adults and college students hoping to graduate happily with manageable student debt.

1.) Create a budget

The first rule of thumb in finance management is budgeting. A budget is an estimate or a plan of how you intend to spend your money over a specified period.

Your budget should include fixed expenses such as food and rent, flexible expenses such as clothing and pocket money as well as discretionary expenses such as entertainment not forgetting savings.

Be sure to stick to the budget as closely as possible.

2.) Save money

It is never too early to start saving for the future or an emergency. You don’t have to save large amounts of money.

Putting aside a few dollars after each paycheck will ensure your savings grow over time, ensuring you are well cushioned in case of an emergency such as a car or computer breakdown.

3.) Don’t buy new

You can save a lot by renting or buying second-hand items. For example, books are a major budget-breaker for college students and unless it is necessary, there is no reason to buy new ones.

You can rent or buy used books from older students or online sites and re-sell them at the end of the year. Besides books, you can also save big on second-hand furniture, electronics and dishware for your dorm room.

4.) Minimise debt

Be extra careful with credit. Do not be tempted to take student loans and mobile advances just because it seems like free money. The fact is, you will pay the whole amount borrowed with interest.

5.) Take advantage of freebies

Once you enroll in college, you will learn just how valuable your student identity card is. Many businesses offer discounts to students for popularity purposes.

From fashion stores, restaurants, bookstores, entertainment joints, electronic shops, insurance companies and travel agencies, the list of such stores is endless. Become a master in hunting these great deals and you will be surprised just how much you can save.

6.) Be frugal

Do not be ashamed to live a simple life. Spending as little as possible to save, invest or simply avoid debt will surely pay off in the future. If you cannot afford it, do not be wasteful by trying to keep up with the latest trends in school.

While some can afford expensive lifestyles, most will fund it with student loans and credit cards something they will regret in the future when the debt starts biting back.

7.) Make use of technology

To help keep track of your income, expenditure, bank account, student loan and credit card transactions and due dates, set up email and text alerts.

Being in the know about your finances will ensure you stick to your budget and don’t miss any payments that might attract late payment fees or ruin your credit score.