Looking back, 2020 was a very challenging year for the education industry. We saw thousands of students graduating from their respective universities, and many more high-school students entering the most exciting phase of their life - College life!
It has become very crucial for students to understand how to manage their expenses, now more than ever. Personal finance is something that needs to be advocated especially for those who are embarking on their college life. Millions of students tend to leave their homes and travel abroad for their higher education and this is when it becomes necessary to understand personal finance, since you will be on your own, and you will get the real taste of managing your expenses.
What is personal finance?
Simply put, personal finance is a financial activity that includes money management, saving, investing and budgeting. All these activities form the basis of personal finance. It is something that is performed both by individuals as well as in a family.
Smart personal finance tips
You might be wondering, okay, I need to manage my expenses, and, learn more about money management, but who will teach me all this? Well, follow along as we list down some of the most important and exciting personal finance tips for university students so that they can master this practice and secure a safe and healthy financial future.
Create a financial strategy
This is one activity that students should follow even before their university begins. Which is to firstly list down all of the necessary potential expenses that may occur when your university life begins. It could be food, entertainment, living, etc. It is always better to have an estimated figure so that you can accordingly plan your finances.
Now if you are a student who is planning to move out of their home country and attend university abroad, it is very important for you to be transparent with your family members and yourself, this means that you should try to get as much information as you can from your parents about grocery costs, or how have they managed their expenses when you were growing up. It is also important to have good knowledge about the country you are planning to live in, keep an estimated figure of the expenses. Try to also speak to your friends or other people who are already attending university and understand first-hand how they manage their finances.
Form a budget
This is the second step towards your financial strategy. Firstly list down the income that you will receive, maybe it could be from a part-time job that you are doing, or it could be the money sent by your parents.
The Second is to list down all the necessary and unnecessary expenses, for example, tuition fees, books, food, living, etc all are examples of necessary expenses that cannot be avoided. Unnecessary expenses, or those that can be avoided, include paying for a cab to your university instead of public transport or buying extra clothes which you will not wear for a while.
Therefore once both these things are in hand, you will be able to analyze income and expenses and, accordingly, you will be able to understand where you stand in terms of your personal finance, each month.
Personal finance - the need of the hour
This whole topic about personal finance, money management, etc is unfortunately taught very little in high-schools especially. There are a lot of different platforms or even creators who try to convey this message that managing your expenses in today’s world is very crucial.
One of the most renowned YouTuber comedians “Tanmay Bhat” himself has not been very well-rehearsed on the topic of personal finance.
So he started a new series revolving around the whole essence of finance, and it includes all kinds of recent developments about the finance industry, managing personal finance, etc. The series/ youtube channel is called Honestly by Tanmay Bhat (clueless series) and it is highly recommended for beginners to watch this space and learn more about personal finance and finance in general.
Effective personal finance apps
If you are already well-rehearsed with what personal finance is and how it works, congrats! You are headed in the right direction. But do not worry, if you are still new to this concept and are willing to learn more, we have listed below around 3-4 apps that immensely help in managing personal finance for students. These apps were mainly selected because they provide a very flexible user interface, and we believe they will suit the needs of every student. Some of them are - :
In conclusion, it is always recommended to understand personal finance at a very early age. There is one rule of thumb that can be followed by beginners. It is called the 50-30-20 rule where 50% of the income is for essentials, 30% on your wants, and at least 20% should be your savings.