Money Tips for Students

Money Habits for Students

Studying is the best time to understand and analyse money, investments, savings and expenditures. It is also the time, when you get to hear about making and using money through quotes like “Money cannot buy happiness” and “Do whatever your heart says”. On the whole, these ideas are very inspiring, but none tells you to stop caring about money or spend them as you get them. Saving a small portion, is always recommended.

In this small piece, we are going to discuss about the necessity, ways and benefits of saving before you get a job, i.e., creating savings out of your pocket money, stipend and part time earnings.

Need to Save: Though you are not required to save at younger ages, as your parents take charge of major expenses for you, developing a habit and preparing yourself for some urgent needs is always a better idea.

Saving from Pocket money and Stipend

1% idea: This is an age and earning specific idea and is best suited when you are younger and have a narrow income. 1% saving idea refers to saving only 1% of the amount you earn. But this does not limit to keeping your money in the bank account, but investing it. Since, you start investing young, you can take a shot on riskier and higher returns oriented stock based investments. Considering a return of around 10-11% for a consistent period ropes in a lot of money.

The 1% idea requires to be taken early and carried on for as long as possible. Since, the income is known to rise when pocket money and internship gets converted to salary, the amount referring down to 1% would definitely increase.

Finding Extra Money Sources: Even before you turn up for a regular job, it is a lot better to hang on to a part time job and not only earn some extra money, but also valuable experience.

If you have good computing, using the internet to get one of those article writing or image designing wouldn’t be a difficult task.

Further, you can even explore that how do you fare in the part time jobs or free lancing and might plan a whole career out of it.

Spending on Skills than Assets: The best way to choose an investment is to select one which keeps on reaping higher returns with time. Learning a new skill, is one such asset creation technique. Intangible, but not invisible, skill learning is not only going to get you expertise in a field, but would also boost your income for as long you keep on learning more and more.

Limits on Spending: A smart mantra to keep your expenses under control is to lessen down on the spending. For example, if you think that you can afford a phone for 1000, you should buy the one under 700. The 300 you saved here would come handy for repair and maintenance and you would get a financial cushion for your emergency usages.

Emergency Fund: An early creation of an emergency fund is always a wise decision. Accumulating funds equivalent to 3 times your usual expense is the key to an ideal emergency fund.  This process is slow at the beginning and takes time to complete itself, but when done, it would never freak you out when you need urgent funds.

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