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11 money lessons for college students

Last updated on: November 28, 2011 07:43 IST

11 money lessons for college students

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Salil Dhawan, Investment-mantra.in

Student life is one such stage of life where most of us have great aspirations to succeed and to make our parents proud. Students come from a varying background -- right from well to do families to ones who can barely manage to arrange their college fees. At this stage of life, most of us hate to think about finances and believe in living in present without worrying about the future.

Still we as students need to take care of our finances and make sure it doesn't get blown out of proportion. There are quite a lot of money lessons we need to keep in mind while studying. We need to understand as youngsters that living mindfully means not just partying in the moment, but taking care of things now, when they're small, rather than when they're huge. Managing money well is not only a good habit to learn but it also contributes to future financial success.

Let's have a look at some significant money lessons for students:

1. Good decision making capabilities

Make sure you as a student get in the habit of making smart choices, and you would over course of time develop a pattern of behaviour that will stand you in good stead the rest of your life. For instance, when you want to buy something, ask yourself "Do I need it?" Don't buy on impulse. If you genuinely need it and can't do without it, go ahead and buy it.

Courtesy: Investment-mantra.in


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2. Set a monthly budget based on money inflow and outflow

Make sure you make a monthly budget to keep your finances in order. Prioritise goals such as college fees, significant books purchase first which can't be done away with. Ideally at the start of the month, estimate how much money you have in your kitty and what expenses are estimated during the month and plan accordingly. Do remember you don't need to spend it all.

3. Spend what you can afford

Keep a tab on your spending. Make sure you plan your expenses on the basis of funds you have at your disposal. Refrain from borrowing money from relatives, friends when you can do without it.

Debt taken from any one is something you will need to return at some point of time. Take special care while opting for personal loan due to high rate of interest.

Save money for later so that you can make much more meaningful use of it going forward.


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4. Learn to invest

Irrespective of howsoever small the amount may be, learn to put some portion of your money aside for long term investment instruments -- it can be a balanced mutual fund or debt instruments like an recurring deposit. Learn to save and invest. With course of time you will realise how crucial was your decision to start investing at an early age. The most significant thing in student life is to realise significance of savings and developing an investment habit.

5. Cut your costs on textbooks: Buy only if you really need one

There are too many Web sites that offer you the opportunity to cut your textbook expenses by half or more. If you can share the book with your classmate, go ahead and do that. Don't go on a buying spree even though you need it only for reference.

In addition, evaluate option of buying used books whenever possible. Selling your textbooks -- the ones that you don't require for further references -- at the end of quarter/semester, could also be considered.


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6. Pay utility bills on time

Make sure you make payments of all your pending bills as soon as they come in. You can usually do this online. Do this two-minute action immediately so as not to worry about it later. If you let your bill paying get pushed back, it becomes a dreaded thing, and your bills start to become overdue, and then it's much worse.

7. Refrain from eating out frequently

Make sure you don't make eating out a habit. An odd outing with friends can do. The bills really add up quickly. Try to keep your wallet intact by eating meals on campus or even eating at home if your parents are nearby.


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8. Make full use of incentives offered to students

Make full use of discounts offered to students, be in restaurants, travel discounts etc. Be aware of all such offers to fetch maximum benefit out from them. Get most from your student ID card.

9. Be careful with your credit cards

Students generally are easy target for credit card companies as they sometimes tend to spend more they can afford only resulting in piling on debt due to high interest rate on unpaid amount. Make sure you are fully aware of dangers of swiping card more than one can afford.

Sometimes it is easy to get lulled into the mindset of endless money when your parents take care of your credit card.


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10. Go for part-time jobs if possible

Keeping a good grade while in college is the significant goal every student thrives for. Simultaneously, if the work pressure is comparatively less in initial months, one can also look at pursuing a part-time job. This will not only help you earn some extra money but will also provide you with much needed exposure. Evaluate if you can pursue it but surely not at cost of your studies. Option of working on weekends can also be considered.

11. Work out common expenses with roommates

Make sure you work out joint expenses with roommates if you are staying in shared accommodation. This will enable everybody to avoid duplicating purchases and excess spending. You can save a lot by such an exercise at the beginning of every month.

To sum it all, try to establish good spending habits, monthly budgets. Idea is to make sure you don't pile up debt as you leave your college. Do remember, college years will be some of best of your life. Make sure you sign on a positive note.


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