Not even adults are usually good at handling their money. Meanwhile, students and young adults usually have even less experience in managing finances and may find it challenging to do that securely and effectively. With many expenses like tuition fees and daily living costs, students need a strategic approach to their finances.
Our easy guide offers practical tips on budgeting, financial planning, and securing your online banking activities, which should help you take care of your money properly.
Budgeting Basics for Students
Most students don’t have the time to work full-time, leaving them only with allowance money or money earned through part-time work. Since being a student isn’t necessarily cheap, budgeting is an essential skill that helps students do the most with what they have. But effective budgeting is easier said than done. Here are some essential tips to get started:
- Track and Categorize Expenses. Keep a daily log of your expenditures. This will be much easier if you regularly use a credit or debit card, as your spending will all show up in your bank statements. Common expenses for students include rent, utilities, groceries, coffee, etc. It’s also helpful to divide these expenses into categories like 'essentials', 'savings', 'education', and 'leisure'.
- Limit Your Spending: Allocate a specific amount to each category and stick to these limits. With that said, don’t beat yourself up too much if you have to go over budget a few times. We all get unplanned spending sometimes, and it’s okay.
- Review and Adjust the Budget. Since you will likely have unexpected expenses and savings throughout each month, it’s important to review your spending at the end of each month and adjust your budget in a way that makes more sense.
The Importance of Long-Term Financial Planning
To effectively manage your money, adopting a long-term perspective is essential. You never know when the monetary emergency may hit, and you need to be prepared. Have a specific fund dedicated to that, with the aim to save enough to cover 3-6 months of living expenses.
Aside from studies and becoming an adult, having fun is another important aspect of being a student. Financial planning isn’t supposed to limit the amount of fun you’re having all the time. On the contrary, it’s there to allow you to enjoy your student life without the stress of financial constraints. With a little savviness, you can balance your budget in a way that allocates resources for both essential needs and leisure activities, ensuring a well-rounded and fulfilling student life. To do so, Identify your short-term (e.g., a new laptop) and long-term goals (e.g., a post-graduation trip).
Using Secure Online Banking to Your Advantage
Online banking doesn’t just help you track expenses, it also makes it much harder for someone to steal your money. To maximize the security of your online banking, follow these steps:
- Set complex and unique passwords for each account and debit card PIN codes.
- Enable Two-Factor Authentication to add an extra layer of security.
- Regularly monitor accounts to detect possible unauthorized transactions.
- Use secure networks, and avoid public Wi-Fi for financial transactions.
The Role of Security Tools
While securing your banking accounts is a great first step, it’s not enough in itself to completely secure your financial data. To maximize security, consider the following tools:
- Password Managers. Password managers generate and store complex passwords for all of your online accounts. There are even Firefox password managers, not to mention ones suitable for Chrome or all the different operating systems like iOS and Android. You likely provide your financial data to many online services, so having these accounts well protected, whether it be a browser or your phone transactions, is imperative for your financial data security.
- VPN Services. VPNs (Virtual Private Networks) mask your online identity, making it harder for cybercriminals and ISPs to track your activity. Use a VPN when accessing your bank account on public networks because that’s where data theft is most likely to happen.
Actionable Tips for Effective Money Management
“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” – Abraham Lincoln.
Effective money management may seem complicated, but is very manageable (no pun intended) if you have a clear plan and stick to it. Here are some highly actionable tips you can use to succeed:
- Set up automatic savings via your bank account.
- Educate yourself by reading books, following financial blogs, and listening to podcasts.
- Take advantage of student discounts to save money.
- Plan your meals and make them at home to significantly reduce food expenses.
- Avoid impulse buys by waiting 24-48 hours before making a significant purchase once you find what you want.
Setting good habits while you’re young can set you up for financial success well into the future. Make sure to budget effectively, plan for the long term, and ensure the security of your online banking activities with tools and general cautiousness. Remember, the key is to start small and then build up with time once you manage the first steps.