Impulse purchase can be classified as an unplanned expenditure. Research states that feelings and emotions play a very important role in case of an impulse purchase, which gets triggered on seeing a promotional ad, offer etc.
College days are the beginning of Financial Freedom yet with limitations, as most of us rely on our parents for pocket money. Every student faces a situation of cash crunch and a desire for luxurious spending. In such scenario one has two options either to limit the expenses to the available funds in terms of pocket money or generate additional sources of income which can support additional luxurious expenses. Smart management of finances plays a very crucial role in one’s life irrespective whether a person is a student, working professional or a self employed.
Here are a few financial tips/dos and don’ts:-
1. Weekly & Monthly Budget
The first step in financial planning is budgeting. One can start with weekly or monthly budget. There are two components of a cash flow (Income and Expenses). Income is limited to pocket money hence one needs to figure out how to spend the same. Prioritising will play a crucial role, as it will help to focus on those expenses which are required and need to be fulfilled on urgent basis. However this exercise can be done in a simple way, have a track of your expenses in either an excel sheet or one can also have the same on a mobile app. Thanks to the technology many apps are available freely which will help to maintain ones finances.
2. Avoid impulse purchases
Impulse purchase can be classified as an unplanned expenditure. Research states that feelings and emotions play a very important role in case of an impulse purchase, which gets triggered on seeing a promotional ad, offer etc. however the point is such unplanned expenditure always have a burden on ones finances; thus an individual should be careful. It is always advisable to carry a list of items to be purchased which will be helpful in buying unwanted products and thus save on expenses.
3. Develop savings habit
It is said Every Penny Saved is a Penny Earned; it is advisable to inculcate savings habit every week/month. The savings shall be invested in a savings account. This will help to build the discipline of savings and investments right from the early age. Investments work on compounding principle i.e. interest earned from such investments will help to earn income – thus in long run your money will work for you instead you working for money.
4. Part time earnings
With the expansion of the internet era, one can easily look out for part time jobs online. One of the most prominent ways is to find out online freelancing jobs which will provide opportunities to work from home.
5. Scholarship in colleges
Usually colleges provide opportunities to student in form of scholarships based on previous academic records, or if one scores above the benchmark level set in the current academic year. Such scholarship not only helps to reduce the cost of education but in certain cases provide an easy finance which will help to reduce the other expenses, especially in case where a student has gone to other city/state to pursue his education.
6. Education Loan – Borrow as much required
With the easy availability of finances, it has become quite common for students to take loan in order to pursue higher education. However the pinch of the loan is felt at the time of repayment of the loan as the same has to be paid along with the interest in form of EMI. An EMI is an expense and outflow every month which will reduce net savings/surplus. Thus it is advisable to borrow to the extent required in order to reduce the impact on month savings.
7. Students discount
Many companies, travelers provide additional discount to students. For example Indian railways and many airline companies in India provide such discounts to students on travelling. Students should utilize such benefits as it will help to reduce the expenses and every savings can be channelized as investments
• Have a monthly budget for both income and expenses
• Take up a part time job which will enhance your savings and investments
• Open an SB A/c and develop savings habit
• Take benefit of students scholarship