College life is exciting because it gives you freedom. It’s usually the first step towards financial freedom and independence. Yet, if you’re not careful, you can end up broke before the semester ends.
Sometimes it’s your fault, and other times it’s not, either way, you should be responsible for every cent that you receive.
Below are essential money lessons that you have to know to avoid financial problems in the present and near future.
If You Don’t Control it, Your Money Starts Controlling You
The best and worst way to experience adulthood is to be at the mercy of student loans. If you’re not careful, you could spend the rest of your life paying it, which can be a burden.
To avoid being controlled by money, you have to know how cash comes in and goes out of your pocket or wallet.
Tracking income and expenses is the first step in gaining control over finances and reviewing spending habits. You can write down your transactions or you can use a free money management application, which makes recording much easier since it is automatic.
Budgeting Equals Strategy
When you budget, you create a financial plan that allows you to allocate different amounts to expenditure, debt repayment, and savings.
You have to know where the money will go once it arrives. That way, you can avoid impulse purchases and use your money for those things that matter.
Budgeting gives you peace of mind to live your life knowing that you’ve sorted everything out. You know that once your pocket money arrives, it will serve you for an entire month
Choose Your Bank Wisely
If you cannot trust yourself with the extra money that remains after budgeting, you should put in a bank. Before you choose your bank, shop around for what is available.
Convenience, ease of cash access, rewards, and transaction costs should be your top priority.
Choose a bank that allows you to access your money when you need it. Make sure that the financial institution has free ATM withdrawal and branches next to your school and where you live.
Go Digital Instead of Carrying Liquid Cash
One of the biggest temptations, when you have money, is to want to spend it. If you have such a behavior, you should consider downloading a free payment app. These apps act like digital wallets and help you to keep track of your expenses.
Furthermore, they’re efficient and safe since you can store your money in the app, create a password, and access that money when you need it the most. You no longer have to carry cash or worry about someone stealing it.
Besides, when you lose your phone, you won’t lose your money since you can still access it on any other internet enabled device.
Debt is The Enemy
In the American society, credit is everywhere. From the cars that you rent to the household items you buy, your credit score will determine whether you get these things. However, before you apply for that credit card or loan, you have to know how you will spend that money and how you will pay it back.
Always have a plan of how you intend to use the money. It’s preferable that you use your loan in an investment that will yield more returns than the debt amount in the long-run. If you need money for food or any other necessity, try to borrow it from a relative or a friend since they are less likely to charge you interest.
Emergency Fund Is a Guardian Angel
In life, you never know when disaster might strike. You could have a job today and then be fired tomorrow. Or, you could wake up one day and discover that you have a serious illness that needs immediate surgery.
What do you do in such scenarios?
You need to put some money aside for emergencies. Open an account that allows you to lock your savings for a specific period of time. That way, you’ll always have something to fall back on in case things get bad.
Freebies and Discounts Are Santa’s Little Helpers
The key to financial management is to make sure that you spend less to get the largest utility. Don’t be too extravagant because you might need the cash for something else. Instead, look for venues that offer discounts to students.
Whether its a theater or a concert, freebies can help you save and at the same time have fun without worrying about running out of money. So, do your research and discover restaurants, books stores, or any other fun place that gives students discounts.
Money management is best when learned early in life or in this case before you finish college. Learning valuable financial lessons leads to making smart decisions and avoiding future money problems.Tags: debt, expense, money management