It is imperative to create your own financial plan as a student in the very beginning itself. Systematised financial planning will not only assist you to manage your expenses well but will go a long way in letting you strike the right balance in your new independent life. Here are a few substantial points to be considered.
Allocate a priority-wise budget: While creating a suitable budget in accordance with the available financial resources is a must, it is even more critical to ensure that the budget you set matches correctly with your set of priorities. For instance, your budget allocation for basics such as books and food ought to precede the expense amount for luxuries like eating out or vacationing with friends.
Monthly categorisation: Again, this is an extension point of prioritisation of your expenses, wherein you as a student should categorize your expense into varied buckets like essential, non-essential, immediate or eventual and those which can be reduced by pooling in together with friends. This kind of strategic assessment and pre-planning of expenses can also help to keep the budget stable and refrain from getting oneself into any difficult situation.
limit your credit: Though, credit cards and other credit options are a great saviour in today’s era and more so for students, but they are also spoilers and often lure one into getting under unnecessary expense and then, debt. It is vital to set a monthly credit limit for yourself and yet, try to have minimal opportunities for relying on it. Rather, one must curtail some of the miscellaneous expenses to limit the credit, if need be.
Pre-deciding swapping game: Swapping game, as the name itself suggests, would mean swapping some of your requirements of a particular month with others as per your changing circumstances. Your budget must have such discretions, wherein you make space for certain unexpected changes and then, you are able to accordingly swap those requirements, making them fast-forward in return for giving in some of the current things at a later stage.
Awareness to make the right banking choices: In this advanced time, where one is overwhelmed with the numerous banking services available from many different banks, it is critical to have complete knowledge about the relevant solutions and what works best in your situation and then, make a sound decision. Moreover, along with the alluring solutions come a lot of terms and conditions, which must be understood well in advance and considered wisely while making your choices.
last but not the least, create a secret wish list of things you would like to buy for yourself but are unable to accomplish at the moment due to limited finances. This list will not only motivate you to stick to your budget but will also serve as a constant reminder of the prize which you will fetch by going the saving route.
Interestingly, there are several universities out there having special finance advisory provisions for their students to sail through the unsteady waters of budgeting. Such exclusive finance practices make it for a perfect example of institutions doing their bit in assisting students to become aware of their financial choices and set their priorities right.
The writer is Tarun Anand, founder, Universal Business School