As a young person it may be difficult to gain control of your finances. Even though money may be low while you complete your studies, it is important to learn good habits now so you are better prepared for the future. Here are 10 simple tips to keep your finances in check.
- Track your spending
It is easy to lose track of where your money goes. Try to keep receipts in a safe place so you can refer back and see what you spent your money on. Write down your spending in your budget and become aware of bad spending habits such as buying on a whim.
- Keep a good credit record
As soon as you enter the working world banks and stores will want to offer you credit and store cards. There is always the temptation to go out and buy everything you want on credit. Everything you buy on credit needs to be paid back so the best way to keep a good credit record is to only buy on credit when you have the cash to pay it off straight away.
This way you can avoid getting into a cycle of bad debt.
- Save for emergencies
It is always helpful to have a “rainy day” fund that you add to every month. Settle on a monthly amount to add to this fund and only spend it on real unforeseen emergencies. Open up a separate bank account that you can transfer the money into as soon as you are paid and if you feel like you could be easily tempted to spend the money give the bank card to a trusted friend, sibling or parent who can hold you accountable.
- Do a monthly budget
Write down all the money you receive, regardless of the amount and add it all together as “income”. Minus your expenses from your expected “income” and you have the basics of a budget. In your expenses include a set amount for going out, food and petrol. Just because you are working to a budget, doesn’t mean you can’t do things you enjoy. Be realistic about your spending limitations. For a step-by-step guide watch the video by NerdWallet below:
- Invest in your retirement
It is never too early to save for your future. Starting a pension fund as early as possible gives you more years to save. Go to the local banks and shop around for investment accounts that can earn you interest. These accounts are often set at a fixed time period which means you may not have immediate access to your money, which will curb the urge to spend the money before you retire.
Many companies have retirement plans which are taken from your salary, when you start working find out what pension or retirement plans your employer offers.
- Learn about taxes
At some point, being a responsible adult means having to pay taxes. Before you get too excited about that first salary learn how to do your taxes so when that first pay check arrives you will know how much to budget towards taxes.
Buy in bulk, coupon, look for the best prices and specials. Making a monthly shopping list may seem like a silly idea but it prevents you from buying things you don’t need.
This will keep your budget in check and save you unnecessary trips to the shops.
- Take responsibility
Becoming an adult means being financially independent. It may be great that your parents can help you out when you need it but the time may come when you need to step out on your own. Take responsibility for your own finances no matter how little you have.
- Cut back on take out
Making lunch at home can be time consuming and not as delicious as getting lunch at your favourite café or take-away but it will save you a lot of money.
Getting a “quick bite” everyday adds up, limiting how often you buy out can make the world of difference to your budget.
Having a student card can come in handy for money saving. Ask for student specials and go to places where students can get in for free.
People understand that being a student is tough, take advantage of the discounts while you can.