The Kind Tips – Tips for Life, Study, Work and Entertainment – Top 5 Money Management Tips for Students

Top 5 Money Management Tips for Students

Top 5 Money Management Tips for Students

For students who just transit to a tight student budget from being fully supported by parents, it is difficult to manage money since dining out, entertainment spending, book and other education expenses could easily add up and wipe out a student’s budget. If a student can learn some of the money management skills, he will be able to spend money wisely and end a semester with running out of money.

1. Know your exact income.

The first step of money management is to understand how much money is available. A lot of students assume they have plenty of money, even when their bank account is getting lower and lower. Hence, at the beginning of every semester, a student should calculate the exact income after tax, such as the financial aid he will get, loans, money from family support, part-time jobs and savings.

2. Determine needs from wants.

When you set budget, you should distinguish needs from wants. Things in needs are those must be paid for while things in wants are those that could be skipped if possible. Students should list all their needed items such as tuition, utilities, housing, groceries, laundry, meal plan, textbooks, transportation, etc. Then, subtract the money from the total income and divide the leftovers into different categories of non-essentials including dinning out, entertainment, clothing, cellphone and Internet, and vacation. If a student can have money available than wants and needs, then it will be a smart choice to consider taking out a smaller loan and pay less back in the future.

3. Use credit card wisely.

For students who just got their credit cards, it can be very tempting and students may assume that they can pay off anything purchased. However, the debt can quickly add up and be paralyzing due to the high interest rates on those magic cards. In order to prevent such situation, students should spend on items with credit card when they can pay off the bill in full. If you are a guy that always do impulse shopping, you should consider avoiding using credit card at all and saving it for emergency only.

4. Track and record spending.

Once the budget is set, students should keep tracking and recording their spending to understand their spending habits and know if they are stick to the budget. The best way to do this is to record every bit of spent money under the category in a spreadsheet. Re-evaluate any category of spending in the budget to get it down if possible. Use an envelope system with labeled envelopes for each categories each week or month to prevent spending from exceeding budget. If the envelope for a category is empty, you should not spend on that category until next week or month.

5. Get yourself entertained in campus.

There are plenty of entertainment activities in campus that are free to students, which can save students transportation and ticket costs. Please keep an eye on the campus announcements or the mailing list to be noticed about the upcoming events.

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