Being a student can be very tough from a financial standpoint, especially when you have to provide for yourself. A lot of students take part-time jobs to sustain themselves and trying to make ends meet with a part-time income can feel like an uphill battle at times. However, there are things that you can do to make things a little bit easier for you. A lot of it will have to do with keeping track of your expenses and making better purchasing decisions. You also need to increase your financial literacy if you feel like your knowledge is lacking in this area. Here’s how you can manage your personal finances as a student.
Now is the best time to start learning how to build a budget. Some people go their whole lives without one and end up suffering the consequences but learning how to make a budget early will set the foundation for your financial future.
Contrary to what many people think, you don’t have to have all sorts of different columns for every expense you have. You can have a simple budget with only four or five categories, like food and beverage, lodging, entertainment, and utilities, for instance. Keeping a budget will allow you to see how much you’re spending versus how much you’re earning and you will quickly see if you’re in the red or the black. You’ll also have a clear idea of how much you have left at the end of the month and you can try to find ways to increase that amount.
Some people are under the impression that they don’t have to file a tax return because they work part-time, but that’s only partially true. If you’re under 18 and/or you make $12,500, then you will not need to. Anyone who doesn’t fit in that category will have to file. If you’re still asking yourself ‘do students have to file a tax return?’ We suggest you check out Tally’s guide on the subject. They explain exactly who should or shouldn’t file taxes and how you can prepare for tax season. They give you pointers as to when you should file your taxes, what happens if you don’t file on time, and different ways you can file them.
Some people will advocate that students should never get a credit card, but we disagree. Using a credit card responsibly could actually be beneficial as it will allow you to start building your credit history. As long as you pay your bill on time, you shouldn’t have any issues. You can use your credit card to make everyday purchases and get the card with the lowest limit you can. Repay the card in full every month and try to pick one with perks that would be relevant to you.
There is no need for you to get a card with the best air miles program on the planet if you don’t intend to leave the country any time soon. Instead, try to pick cards that will give you things like cashback on groceries and gas if you have a car, or various entertainment options like concerts and movies if that’s your speed.
Now would also be a good time to start learning how to save. A lot of people pay their bills, spend on whatever they want, then save the rest. But, in reality, you should start by paying your bills, save, then spend the rest. You should save at least 10% of your gross income every week. To make things easy for you, you can set up a savings account and have that amount taken directly from your check. If you want to save more, you can transfer any money you have left the day before payday into your savings account. This will allow you to accrue savings much more quickly and won’t feel like a strain on your finances.
Many students have the bad habit of spending way too much on take-out food and beverages. Nothing is stopping you from treating yourself to a nice dinner from time to time, but if you eat out more than three times per week, it’s probably too much. There is no reason to eat out that much. You should learn how to cook instead and, if you have a craving for take-out food, know that there are tons of less expensive options in your grocery store. If you love eating pizza a lot, you should consider buying frozen pizza instead. Or you could buy frozen pizza dough and replicate the local pizzeria feel on a budget. You could even do everything from scratch.
If you want to save as much money as possible, you should learn to make as many things as you can yourself and avoid prepared foods whenever you can. Even things like pickles can be made from home for a fraction of the price. So, look at what you’re buying right now and what you could make instead.
These are all things that you should do if you want to have a tighter grip on your finances. Make sure that you follow this advice to the letter and always try to find ways to save so you can have more room to breathe.