When you are a student you are relieved from many responsibilities. Your focus is entirely on studies and you enjoy the memorable time with your friends. In most cases, all your education expenses are taken care by your parents and you do not have to worry much about the cash flows. Although there are students from economically weak families who have to care for each single penny they are spending.
Adopting a financial planning approach when you are a student helps in building your financial future. Bringing financial discipline early in life ensures that you avoid making mistakes which leads to straining your finances and stressful professional career.
Here are few tips to increase your awareness on personal finance which ensure your financial well- being in the future:
1. Have Awareness on your Expenses
Till you are a student, you are dependent on parents for your needs. Your tuition fees, admission fees, expenses on accommodation etc. all are taken care by them. Your concern is the least on knowing about how expenses are being met, unless your family financial situation is not healthy. Unfortunately, in most cases parents stretch out to ensure their children get the desired education. Awareness on your expenses helps in keeping you informed and take sound decision when you start your family. You can use money management tools available online to create a budget which gives you an estimate on what you received form your parents and how it was spend. Awareness on your fees and accommodation expenses makes you realise what is the amount of money that is spent on your education. It helps in planning at later stage of life when you start a family. Also, you keep a check on your spending habits which eventually will decide how you manage your finances when you start earning.
2. Search for the Help Yourself
Many parents do not have enough funds to meet the high cost of education. Hence, they either look for some scholarship or rely on education loan. Generally, they do not involve children’s in such decisions. But as the need to become financially savvy along with the flow of information is increasing it will be a wiser approach to analyze the options yourself. Search colleges for scholarship which you desire to join and analyze education loan options online or visiting various institutions. This will also help you to prepare for any loan liability you might have to shoulder when you start working.
3. Understand Terms & Conditions
Credit Card and Debit Cards usage is increasing right form the age you land up in college. I have seen many parents whose children study abroad. They transfer fund to the child account in India as per the need. In some cases credit card is issued to the child name which they utilize it and parents repay. Although, parents keep a check on all these usages it is helpful if you as a student understand the terms and conditions in detail since credit cards has been the biggest contributor in bad credit history. Education loan also has details terms and condition which if you are aware you can make the best out of it in your repayment days. Thus, understanding terms and conditions in financial instruments helps you in increasing awareness and avoiding any mistakes which can lead to unhealthy financial situation.
4. Ensure your Credit History Remains Sound
This is very important since your borrowing in future will be dependent on how your credit history evolves. By making yourself aware on the various aspect discussed above, you will be able to manage your debts more efficiently thus keeping your credit history good. You have organizations like CIBIL for keeping a check on your repayment habits.
5. Take help of Professionals
Although most individuals prefer taking help of professionals at later stage of life, there are many resources open to students now where information is available or you can post your queries. There are personal finance blogs, print media query sections, training programs by professionals to students and many other resources which can be utilized by students to resolve their queries. With time and inclination to learn, you can reap maximum benefit as a student. If required, use paid services to understand about your personal finance.
Being a student is always a memorable time. You try to nurture your career ahead and make new friends some of which remains for life. But with a little focus and awareness on personal finance, you can ensure sound financial decisions and secure your financial future.