Has it ever happened to you that you were out of money in only a week or ten days of getting your pocket money? We know you have but don’t stress; you are not alone. All of us have been there, especially in our student years.
As soon as we get our pocket money, we think of everything in the world that we can spend money on. Also, between all the canteen treats and movie bunks, who has the time to track all of this, right?
But it’s only fun till you have money to spend. Thankfully as students, we have our parents to fall back on for some extra cash. However, that’s not how it works when you grow up. So it might be better if you start taking baby steps and begin managing finances as a student to eventually become a pro at it.
You don’t have to wait to get into a job to practice. You can start today.
8 Money Management Tips for Students
Here are some money management tips for students to become financially confident:
1. Live Below Your Means
Living below your means is one of the first steps towards managing finances in college. It means spending less than what you make. It might also sometimes mean no regular eating out, but hey, you are saving money!
It allows you to have extra cash left over by the end of the month. Whether your allowance is hefty or scarce, try to adjust your lifestyle around a percentage of what you get and save the rest.
We know that it sounds like mission impossible now, but the upside is you can get into the habit of saving and maybe get your own PlayStation one day.
2. Save Before You Spend
Savings can come across as one of the most unappealing money management tips for college students, but it is the most sustainable of them all. If you are a spendthrift and have an urge to splurge on unnecessary things, this should be the right way for you to manage finances in college.
As soon as you get paid, get into the habit of setting aside a portion of money towards savings. Initially, you can start with a small amount and increase your savings slowly.
Suppose you get an allowance of ₹5,000 each month, set aside ₹1,000 before you spend anything and try to cover up your expenses in ₹4,000.
“Do not save what is left after spending, but spend what is left after saving.” – Warren Buffet.
As a student, you will be dealing with a fraction of what you may have to deal with as an adult. So getting into the habit of saving in advance now can help you manage money better in the long run.
3. Be a Smart Shopper
Shopping sprees sound exciting, but nothing burns a hole in your pocket like reckless spending.
Think about it, how many things in your room did you impulsively buy and never used more than once? Been there, done that🙈.
One way to tackle this is to sleep on your purchases. Every time you find yourself in an urge to buy something, try resisting it for at least 24 hours. If you feel the need for it after that, by all means, go for it. But you will not believe how much you would have saved by resisting impulsive buying.
Another suggestion here would be to avoid going on shopping sprees. If you do, see if there is a discount or sale available.
Two tips for enjoying shopping while saving money are:
Utilise Student Discounts
Many places, such as restaurants and stationery shops, offer a discount to students. Try to explore more such places.
Buy Used Goods
Unless it’s food or clothing, you can consider buying used goods. For example, you may need a book for one semester. Instead of buying a brand new one and throwing it away later, you can invest in a used book or a library pass that lets you access all books.
4. Don’t Just Save, Invest!
The biggest benefit of getting smart with your finances early on is having enough ‘TIME’ to grow it.
Instead of stashing cash away in a savings account, you could start investing to reap the benefits of compounding. Compounding is a financial wonder that grows your money exponentially by reinvesting the returns from your investments.
You don’t need a lot of money to begin investing. Start with as low as ₹100 with cryptocurrencies or Mutual Funds and increase the amounts gradually. Read our detailed guide on popular investment plans for students to learn more.
Even if you start investing with ₹1000 every month, starting now, you will be way ahead of your friends who may start at 25 or 30. Whatever you save, make sure you invest some part of it and let compounding do its magic.
5. Get a Part-Time Job or Start a Side Hustle
If savings and investing look out of the question to you, probably it’s a sign to look at it from a different angle.
As a student, you might have a lot of time after classes; utilise this time to make some money.
You could apply for part-time jobs or start a side hustle like freelancing to earn money while studying. You will not only earn money, but it also adds to your experience.
If you start earning early, no matter how little, you will get better at handling money. This experience will enable you to handle larger amounts in the future skillfully.
6. Set Financial Goals
For how long will you walk in the dark without knowing where you are heading? Not very far, right? It’s the same with money management also.
If you don’t know where you are headed, you won’t be able to follow the path for long. Having a goal like building a rainy day fund or saving for a trip motivates you towards saving, investing and utilising every penny.
Not knowing why you are doing what you are doing can sometimes slow you down. It is a healthy practice to follow as you manage money and set yourself up for financial independence.
7. Plan for Retirement
Do you really want to work till you are 60? If not, start setting aside some of your pocket money/income towards retirement while you are a student. It’s never too early to start planning for retirement.
You could start building your retirement corpus via investments like cryptocurrencies or with a safer option like a public provident fund. It takes a good 20 -25 years to build this corpus before you retire and live your dream life. The more aggressively you save and invest, the sooner you can retire.
While you do this, ensure that you don’t have any debt and if you take on any in the future, try paying it out as fast as possible. This way, you should be able to retire in the next 20-30 years.
8. Become Financially Literate
Congratulations for making it to the end of the blog!! Now that you are set to excel in money management, you should know that financial literacy goes way beyond.
Don’t stop here; keep learning and implementing such financial tips and habits in your life. Here are some books on personal finance that you may want to look at to learn more.
Globally, only 33% of adults are financially literate. In India alone, hardly 24% of adults are financially informed. Becoming financially literate could help you lead a better financial life and keep you at the top of your finances and investment.
The Bottom Line
Hopefully, these tips will allow you to manage your money effectively, and you won’t be out of money in just a few days of getting your pocket money. Now, no need to go to your parents before the month-end for any extra cash. In fact, they might come to you to take some money management tips.
1. How do students manage their money?
Most students don’t plan their finances and hence cannot track the inflow and outflow of cash, leading to poor money management. So keeping track of what’s coming in and going out would be one of our money management tips for college students.
2. Why is money management important for students today?
Money management skills for students are very important; lack of it might steer them towards unhealthy financial habits like credit card debt, income expense mismatch etc. So we would recommend you to begin managing finances as a student and ace personal finance.
P.S: KuberVerse is an educational initiative. Anything expressed here directly or indirectly is not investment advice. And we ask you to do your own research before investing.
Disclaimer : Crypto products and NFTs are unregulated and can be highly risky. There may be no regulatory recourse for any loss from such transactions. The information provided in this post is not to be considered as investment/financial advice from CoinSwitch. Any action taken upon the information shall be at user's own risk.
Table of content
Subscribe to Our Newsletter with exclusive content.