Although the earlier you take the ‘leash of your life’ the better, it is the college life where you have the best shot at it. Especially the financial one. Yes, it’s the taking control part which could be the most challenging. But it also teaches you the life skills that will ready you for the future. Planning your money, budgeting your expenses, and meeting your goals within your budget, are some of the greatest challenges of your college life.
Students who miss out on this part frequently find themselves out of money before the month is over and constantly beg for more from their parents to meet their bare necessities. Such students may seem to have a lavish lifestyle in college days but are missing out on an important life skill that makes people financially independent and eventually free.
You may be enrolled in a professional course – medicine, engineering, law, or pursuing an MBA. At times studies are expensive especially if you are aiming for a foreign degree. Debt is the best way to finance such expenses, rather than emptying your parent’s hard coffers. Budgeting plays an important role here as well. Start planning for your financial goals right away, start budgeting and chances are you will not only get a degree, but also a stable career, and a plan to go debt free when you proudly walk up to the stage on your convocation day.
Here are a few tips that will help you to manage your money effectively as a student.
1) Make Your Family Part of Your Budgeting Process
In the Indian scenario, it is very likely that your family is paying for the part or all of your higher studies. You need to start by involving your folks when you first create your budget. Make sure you are on the same page as them. Who will pay for what, whether you will be given an allowance while you are studying, if so, how much – these are things that you and your family need to thrash out.
Also, you get lot more insights for your regular budgeting exercise from the people who know you best.
2) List all Your Income
Write down all of your potential income sources and amounts. Scholarships, loans, grants, everything matters, when you are pursuing higher studies. Also include sources like your savings, part-time job earnings, and so on. This will give you a clear insight on what you can do to increase your income and plan accordingly. Also, you get to know which scholarships to focus on and which are not worth trying for.
3) List all Your Expenditure
After getting a clear idea of your potential sources of income, list all of your potential categories and amounts of expenses. Include items such as tuition and fees, books and supplies, room rent, food and snacks, personal care items, transportation, mobile phone bill, internet bill, entertainment and social activities, and so on.
To this, add a certain amount for miscellaneous expenses. Try as you might, you may not be able to figure out all the things you would have to spend on. That’s why you need to budget an extra amount – just in case.
It is quite possible that you are not sure what all you are spending on. After all, till now, you have been living in a family, with your parents to shield you. Now, you will be stepping out on your own. So, you may need to track your expenses for a while to figure out what you are spending on. When you record every outgo, you gain visibility into your expenses. Armed with this knowledge, you can figure out if there is any wasteful expenditure.
4) Distinguish Between Needs and Wants
The thing about money is that it likes to go – to various places! You could start with a nice, neat sum, thinking it will easily cover you for a month, and by mid-month, you start wondering where it went. Yes, money does like to go. To get a hold on it, you need to distinguish between your needs and your wants. Room rent, utility bills, food are needs. Going to a beauty parlour to get your eyebrows done, the restaurant to eat your favourite Chinese dishes, the cinema to watch the latest release – these are your wants. Now, there’s nothing wrong in doing any of these, provided you can spare the money. So, keep checking periodically whether your budget allows you to spend on your wants.
5) Live Below Your Means
You have heard of living within your means, right? Forget about it. You need to live below your means. This could be achieved by taking a bus or a metro, even if you have money that month for taking a taxi, skipping buying an expensive birthday present for your girlfriend/boyfriend, though you think you can, staying home on a weekend, even though you might be able to buy a few drinks for the party, and so forth.
Graduation is that time of your life when you learn most important life skills, build lifetime friendships, and go through the defining life experiences together with your best buddies. All, at the same time with the most important chapter of your education. You may be lucky and land up a college in your hometown, but as with most students, eventually, you must move to a different city and “take control of your life”. If you learn to live below your means and have the discipline to do so, you need not worry. You have won the battle against scarcity of money, those who haven’t will always feel there isn’t enough.