Budget constraints are a big chunk of student life and often, students end up making it worse due to ignorance of financial mistakes. Guides are always available on financial tips but seldom do we see guides on financial mistakes, that must be avoided. You might be getting a monthly expense from your parents for your studies, or earning through some other sources. This blog will be your guide on ‘what not to do’ in terms of student financing. Avoid these traps for a financially relaxing student life.
- Not tracking your expenses
In order to get control of your money, you MUST track your expenses. Not tracking expenses is the major reason of distress among students. It enables ‘impulsive spending’ and allows you to buy things you don’t even need. You must have the full control of your money. Analyse the things you are spending on. Categorise them as your needs and wants. Discover why, or on what items, do you spend unnecessarily and cut them off.
- Make a monthly budget and specify the amount you will spend on needs, wants and the amount that you will save. This will set a limit on your expenses and you won’t end up buying useless stuffs.
- Use digital money-tracking applications or traditional diary for this purpose. Mention your each and every expense in it. This helps in getting an overview of your budget and expenses.
- Do not spend your whole budget. Save as much as you can after tracking your money. You can use this to invest and grow your money after proper knowledge and researching.
- Do not spend out of FOMO (Fear of Missing Out). Your friends may show off their new watch or shoes. Do not spend on such goods merely for showing them off back. Be mindful.
- Not having a side hustle
A better way to manage budget constraints is to create new income sources. College life is the best time to experiment and try new things. If you have a skill you are good at, monetize it. If you are a good writer, write blogs or e-books. If you are a good sketch artist, sell personalised sketches. If you enjoy social media, become a social media manager for some agency. Whatever your skill is, grow and earn from it. If you don’t have any skill, learn and then earn. Earning money in student life isn’t as difficult as it seems.
Refer to our previous blog to get an idea of passive income sources.
- Ignoring Financial literacy
Just as our schools and colleges did. Having money isn’t the thing. You should be able to handle it. Without financial literacy, you will get stuck where you are, forever. It is important for every financial decision you take. Being able to control and grow your money is one of the greatest freedoms you will ever have. Being students, you have the perfect time and reason to gain financial literacy. This will be an asset for now and forever, and won’t cost even a penny.
- Start being curious. Search and learn about every common financial term you hear. Stocks, GDP, investing, crypto, investment apps, etc. Watch videos and read blogs to grow your knowledge.
- Learn investing. Understand its risk and benefits and create a unique investment plan for yourself.
- Once you have decent knowledge, start investing your saved money in SIPs or stocks for long term. This will be yet another source for your income.
- Borrowing from friends
Spend only when you have money, not by the assumption that you will get money again next month. Avoid borrowing money from your friends as long as you can. Don’t put yourself in the habit of being in debt at such an early stage. It creates an additional liability and consequently leads to stress.
- Borrowing money increases your financial dependence. It curbs your freedom by already allotting a share of your future money as repayment. Once you start borrowing, it becomes a habit.
- It also has the capacity to ruin friendships and relations.
- Instead, never let situations go that way. Increase your own income either by cutting expenses or increasing sources.
- Not being aware of scholarships/student benefits
Getting a scholarship can highly reduce your expenditure on education and can be a relief to your budget. Most of the students are unaware about different government and private scholarship schemes.
It is important to search and check for your eligibility in scholarships provided by the government or your college. Keep checking your college website and government websites for the same.
You can also avail discounts on various products, flights, and courses by using your college student ID.
- Prominent airlines like Indigo and SpiceJet offer about 6-10% discount for students.
- Udemy offers some free courses for students.
- Discounts on Lenovo, HP, Apple Laptops.
Search for more such discounts and use your college ID profitably.
Read our blog on financial tips for teenagers here:
