Mastering personal finance is an essential step in ensuring that your financial health is safe and secure – not to mention it’s a huge de-stresser when you know how to talk money!
However, students around the world are experiencing shockingly low financial literacy rates (see this report from the Brookings Institution). Sadly enough, students all around the world are failing to learn the personal finance skills that they need to get by in life!
I’ve had my fair share of struggles with personal finance and I’ve learned a good number of lessons along the way. So, here are some personal finance tips that every student should know. Let’s get started with my first personal finance tip…
The Importance of Having an Emergency Fund
It’s always better to be safe than sorry. That’s especially true when it comes to your money.
Unfortunately, accidents and emergencies happen and you’ll never know when you might need to dig deep into your wallet in order to cover an expense. And when that inevitably happens, you can find yourself really tight on cash.
Throw in your busy schedule as a student and you have yourself a stress overload.
Who likes being stressed?
I started my own emergency fund in my freshman year of college after getting an MRI for a knee injury I suffered in the spring. I had to deal with a HUGE medical bill that wasn’t covered by my insurance! And while I eventually figured out a payment plan for the fee, I was still shelling out cash to the hospital months after my initial screening.
So my first personal finance tip? Start an emergency fund.
It doesn’t matter how much money you invest in it initially, but do yourself a favor and have a backup plan in mind. You’ll be thankful the next time a financial emergency arises and you have a cushion of cash to fall back on.
Schedule Some No-Spend Days
This personal finance tip is surprisingly effective.
One of the scariest aspects of personal finance is just how quickly your spending can get out of hand. While things such as coffee, donuts, and boxed sushi might seem affordable and cheap, those daily expenses can pile on and really take a hit on your bank account.
One solution you could try [and a solution that worked wonders for me] is scheduling no-spend days!
It works just like it sounds – every once in a while, throw a no-spending day into your calendar. Your bank will thank you for it!
The key with this tip is responsibility.
Not only do you have to restrain yourself on these no-spending days, but you also have to be responsible with your spending on any other days! Just because you don’t spend on one day doesn’t mean you can splurge on another. Always be responsible with your money!
Unsubscribe from Sales E-Mails
Speaking of responsibility with your money, I bet you have a tough time keeping your wallet in your pocket when you see those amazing sales that get sent to your inbox. I know I do!
So, as a solution, I unsubscribed to all the retailers and brands that were cluttering my inbox with their deals and coupons! As a result, I don’t get tempted by my favorite stores AND my email is fresh and clean!
This personal finance tip is incredibly important because it helps you overcome that spring sale fever. Remember: buying something because of a sale doesn’t necessarily mean you’re saving money!
All it means is that you’re spending less money [than usual] to buy something you otherwise wouldn’t have purchased! Either way, you’re still spending money.
Keep Track of Your Saving and Spending!
Ultimately, it’s most important to just keep track of your spending so that you know your financial situation at all times. The worst thing that can happen to you and your finances is getting hit with a surprise fee and not having enough money to pay for it!
The common trend with all of these tips is responsibility.
As a student, it can be especially hard to set some time aside for your finances. However, it’s important that you do so for the sake of your financial health!
The simplest and most effective thing you can do – and my final personal finance tip – is keep track of your saving and spending.
I can remember countless times in the past when my bank account budget was not what I expected it to be, whether that’s because I spent too much or was still paying for subscriptions I didn’t know I had.
If you take the time to shore up your finances and figure out your spending and saving habits, I promise you – and your wallet – will feel miles better!