Students quite easily get influenced by the outside world. Because of their usual immaturity, many of them can not make proper financial decision in their college life. Their impulsive nature force them to spend beyond their limits. The credit card issuing companies also take advantage of this easy going attitude of the students and issue credit cards to them without judging their repayment capacity. The aim of these companies is to expand their business at any cost. The result is catastrophic as many students fall into financial crisis at the very beginning of their career.
Remember, as a student, your prime concern must be your studies. You must try your best so that you do not fall into unpleasant financial crisis. You need to follow certain tips to avoid financial woes.
Check out some DIY tips that can assure a better financial life.
Be aware of the cost of living
You need to keep a track on all your expenses. In order to do this, you can maintain a diary wherein you must list down all your expenses. Keep records of the money you're actually spending on various items such as utilities, rent, parking, school supplies, groceries, transportation, student activities etc. This will help you get an idea whether you are spending more on a particular item or not. This will assist you to plan a realistic budget.
Craft a frugal budget
As a student, you need to follow a budget throughout the month so that you don't face money problems. Determine the total income and expenses in a month so that you can make a budget accordingly. You can monitor your income, expenses and savings if you follow the budget throughout the month. Try to evaluate your budget at the end of the month.
Inculcate savings habits
You must have a savings account where you can deposit some money on a regular basis. If you save something on a regular basis, you will surely be able to build up a moderate fund. As you're a student, it is quite possible that you don't have a fixed income to support yourself. In such a situation, you must be getting some allowances from your family members or you may be earning a meager amount of money from a part-time job. Make sure you save at least 10% of it. This is the best way to build your emergency fund on which you can rely.
Make judicious use of credit cards
Improper usage of credit cards can lead you to serious financial crisis. Avoid using multiple credit cards. Moreover, do not use credit cards for meeting daily expenses. Again, if you are making any big purchase, try to pay it through cash. Many credit card issuing companies are offering very low or no down payment as well as very low or zero interest rate. Dig information on those credit cards. Sometimes, you may not be aware of the huge hidden expenses that are involved with these credit cards. Don't get tempted by these offers.
Make frequent use of cash
If you're into the habit of swapping cards for every little need, you have to change it immediately. Carry cash in your wallet so that you can at least buy things that you can afford with cash.
Avoid impulsive purchases
Though it is easy to say, but it is difficult to implement it in actual practice. In fact, many of you spend a lot of money on cell phones, restaurant bills, movie tickets, etc. The designer clothes as well as the electronic products which many of your friends use also tempt you. However, in order to manage your finances in a better way, you need to control your desire and give your priority to avoid impulsive buying.
Lead a frugal life
Frugality matters! It is a very common tendency that when you're staying with your friends, you tend to lead a life as per your own wish and forget the reality. Stay away from friends who love to lead lavish life so that you can focus on your personal finance goal. Eat out less and eliminate all the unnecessary things from your list to taste financial freedom.
Financial ignorance (specially amongst students) is the main reason behind the increasing student debt level in the United States of America. You've to be a bit more dedicated towards your personal finances to have a rein on your finances. Parents should not stuff their kids with multiple credit cards without educating them about how to use them and the after effects of misusing plastics.