When you leave home for the first time, you face new experiences and challenges, putting your real-world knowledge to the test. Further education programs can expand your academic understanding, but real-life experience is what really prepares you for the responsibilities of adulthood, including financial management. By practicing some early financial planning, university students can enhance their economic responsibility and feel more confident for their futures — here are a few key financial skills to learn as a student.
Budgeting is one of many effective financial skills for students to learn. This strategy can help you live within your means by spending less than you make. Many students work part-time jobs during the school year, helping them maintain their basic needs.
Instead of just earning and spending, sit down and create a plan for how to manage your money. Jot down your expenses - like tuition payments, loans, rent or living costs, groceries and books — and measure them against your income. Break down your spending week-by-week and plan out a budget that allows you to meet all your financial needs.
By creating a financial budget, you can generate a spending schedule and focus on your future endeavors. Brainstorm a few ways to save even more — for example, buy your books secondhand rather than brand new from the university bookstore, and meal prep during the week instead of grabbing lunch on the go. These little adjustments can add up to a lot of savings, and learning budgeting skills early will help you once you graduate and go off on your own.
Society Financial Management
At university, you may have a limited perspective of your financial future — even if you’re working part-time, you probably aren’t planning or saving for months or years down the line. One way to learn long-term financial responsibility in university is by becoming involved in a student club or society, where you may have the opportunity to draw up budgeting plans and oversee fundraising efforts.
Participating in financial planning for a cause outside yourself can help you gain perspective on the importance of looking ahead. For example, your club may have a yearly fundraising goal, a specific budget plan for where to allocate what funds, and a long-term vision of larger projects you can achieve with more club earnings. This kind of planning is a fantastic way to learn how to set goals for your own future — whether that means saving for your next holiday or even your own place, looking ahead to plan and budget is key to reaching your saving goals.
Credit cards are another way to learn money management for university students. Many banks provide cards specific to young adults learning about financial planning, but it’s important you are aware of the pros and cons of using credit cards. Only borrow what you can afford to pay back and make sure you pay it back in full each month.
If you find a student credit card to help build your credit score, try making your everyday purchases using this card instead, and set a day each month to pay off the card before the payment is due. This not only helps you achieve better credit, but it can make you more aware of your spending habits — when you know you have to pay off a larger bill at the end of the month, you’ll be more likely to stick to a smarter budget.
Credit cards can also help teach you about the longevity of your spending and saving patterns — the way you manage money now affects your future, and falling into good habits will help you build more financial security.
The Earlier, the Better
As you enter university, jumping into financial learning strategies right away can really help you get ahead. Make time in your everyday life, extracurricular activities and payment planning to budget, look ahead, and develop financial skills for your future.
Ginger Abbot is an education and learning writer, as well as the managing editor of Classrooms, a college and university site for students. Read more of her work on her author page.
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