Connect with us

Hi, what are you looking for?

Creating Strategy for Long-Term Personal Financial Planning as a Student

For most students, college is an exciting and challenging experience. Moving away from your parents, living on your own (or with a roommate), making decisions for yourself, and managing your finances are just a few of the challenges you will face.

Making a plan ahead of time and following it as closely as possible will help you survive the transition with the least amount of stress. Here’s how to create a solid financial foundation during your college years.

Start with Your Expenses and Budget

One of the first and most important steps for successfully and properly managing money as a college student is to truly understand your expenses. Some students spend much more money on their assignment writer Uk based services, and because of this students face budgeting issues at the end of the month.

The first time you are confronted with the unpleasant reality that there are limits on what you can spend. However, you can soften the blow by knowing the basics of budgeting.

  • Making a Budget

A budget is simply a planforhow you want to spend your money each month. Start by making a list of your fixed expenses in college, such as rent, tuition, books, car payments, utilities, and meals. Make a list of your discretionary expenses, such as clothing and entertainment.

Budgets are the most effective tools for managing your money and preventing you from overspending. By making a budget, you may have fun and take advantage of new opportunities without worrying about missing payments on necessary expenses or accruing overdraft penalties due to insufficient funds in your bank account (Musa, 2019).

A budget helps you to stretch your money to cover everything you need while also allowing you to spend additional money or save it for bigger purchases you want down the road.

  • Avoid Impulse Buying

College can be some of the most carefree years of your life. However,carefree does not mean reckless. As a college student, your income is sometimes limited, so it’s important to live within your budgetmeans to avoid overspending. Be selective about where you spend your budgeted amount once the semester starts.

Living within your means now prepares you for future financial success by limiting the amount of debt you’ll graduate with and creating healthy financial management skills.

There are also various college student discounts available, particularly near your college, that can help you save money. Look for student-priced showings at your local movie theatre or ask your server if the restaurant gives a student discount or accepts your college dining-plan card or search online resources which offer discounts on writing services like accounting assignment writing service. These extra savings can help you reach your savings goals (dissertationproposal, 2020).

  • Considering Insurance

Yes, you need insurance, and no, it isn’t just for the old. Auto insurance is required by law, so that’s a no-brainer. Because insurance companies consider teenage drivers to be risky, rates might be high. Look around for the greatest price. Using your parents’ policy can qualify you for discounts.

Although navigating health insurance as a student can be difficult, coverage is essential. Although you are unlikely to have large medical expenses, hospitalization can be financially devastating for you and your parents.

Many schools also provide student health insurance. They aren’t always as generous as insurance from a private carrier, but the costs are usually reasonable, so the plan can make sense for you.

  • Saving and Investing

Time is a big advantage for young investors. Even a little monthly investment can increase significantly because of the wonders of compound interest. Assume you save $100 each month and receive a 5% annual return.

It is never too soon to start saving and investing. However, rising tuition fees may make this unattainable for most college students. “Just because you’re not saving doesn’t mean you’re doing something wrong,” says Roberge. That doesn’t mean you shouldn’t try to save money. Bank your summer earnings and save any loan or scholarship money in a safe place. Try to save a little money each month for a rainy-day fund.

  • Credit Card

While credit cards are excellent tools for establishing credit, they are commonly misused, particularly by college students, and can swiftly ruin your financial health. It can be quite tempting to use credit cards to pay for exciting nights out, eating out, new clothes, and so on.

However, if you can’t afford these things within your budget, you won’t be able to pay them off at the end of the month, causing you to accrue credit card debt on top of your student loan debt.

Credit cards can be great ways for students to earn cash back or other rewards, but only if you commit to paying off the balance at the end of the month. If you decide to get a credit card when you start your first semester, look for a credit card offering thefollowing features:

  • Cash back rewards
  • There are no yearly or other fees.
  • Introductory interest rates of 0%, with low-interest rates after the introduction
  • Creditis limited.

Improving your credit score is important because, after graduation, you may wish to rent an apartment, obtain a loan to purchase a car, or eventually purchase a home. For these types of financial moves, your credit score is important, and the higher your score, the easier it may be to obtain approval and get the best interest rates on loans.

  • Create an Emergency Fund

Consider setting up an emergency fund in addition to keeping a budget. This quantity of money will serve as a safety net in caseof an unexpected financial crisis.

You should ideally have three to six months’ worth of expenses saved up. But don’t let that figure scare you. Set aside $50 per month to start building your money. When you have unexpected expenses, an extra $500 or $1,000 will come in handy.

  • Beware of Overspending on Your Textbooks

Textbooks are a college requirement for students, and new textbooks are expensive, particularly at your college bookstore. To avoid overpaying for textbooks you won’t use, consider renting them from your college bookstore or purchasing used textbooks from internet retailers (e.g. Amazon, eBay, etc.).

If you can’t find a used or borrowed copy, shop around for the lowest price on a new textbook.

Wrap up

While college is a time to spread your newly independent wings, it is also a time when students dig themselves a financial hole that is difficult to get out of once college is over.

As you start your first semester, include some useful financial planning strategies into your routine to start your financial future on the right foot, developing good money-management habits while avoiding excessive debt.

Reference

Ismail Musa, L., 2019. Startup tips are crucial to vocational students.

DP, 2020. Best Student Card Discounts: How To Get Them? Online available at greater than https://www.dissertationproposal.co.uk/guide/best-student-card-discounts-how-to-get-them/>

[Accessed Date: 17-Oct-2020]

Press Release Distributed by The Express Wire

To view the original version on The Express Wire visit Creating Strategy for Long-Term Personal Financial Planning as a Student

Written By

You may also like:

World

Calling for urgent action is the international medical humanitarian organization Doctors Without Borders/Médecins Sans Frontières (MSF)

Business

The cathedral is on track to reopen on December 8 - Copyright AFP Ludovic MARINParis’s Notre-Dame Cathedral, ravaged by fire in 2019, is on...

Business

Saudi Aramco President & CEO Amin Nasser speaks during the CERAWeek oil summit in Houston, Texas - Copyright AFP Mark FelixPointing to the still...

Business

A recent article in the Wall Street Journal infers that some workers might be falling out of the job market altogether.