By Minna Tian, University of Missouri
Unless you recently won the lottery, managing cash is an essential skill that most of us should possess. In our daily lives as students, we are faced with a lot of competing priorities such as exams, papers, work and life, and family commitments, to name a few. For many people, there is no time left to manage our finances. It is therefore essential; we learn how to manage our finances because, at college, we experience managing money on our own.
The College Investor online publication says the number one way to manage your money in college is to avoid taking out unnecessary loans. That means you need to be frugal.
Creating a budget is the first thing. The key to developing a budget is to pinpoint needs and wants. In our monthly budget, we should begin by listing any parental allowances, savings from the previous months and any other monthly income. After listing the above, the next step is to write down all monthly expenses, ensuring that the list takes into account school supplies, personal care items and even laundry. One should also include fun expenses because a little fun is crucial for our college lives. The bottom line is that listing all expenses ahead of time puts one in front to manage cash in better ways.
We should also set aside emergency funds. Whether in college or not, emergency saving funds are essential for financial health in the coming future. As we all know, life is full of ups and downs and having a financial emergency fund acts as a safety net in case emergencies occur. When one is starting to save for an emergency fund, they must fund the accounts regularly by setting a financial limit that is easily manageable. It is also essential to set the account differently from the typical day-to-day operating account.
At college, we should also be smart about building credit. It’s easy to get a credit card and fall behind. Thus, we should avoid credit we cannot afford.
I also feel another way to reduce expenses in college is through sharing expenses with a roommate and watching out for impulse spending. Finding a fiscally compatible roommate might take time, but if the two of you have the same attitude toward money, that saves a lot of heated discussions.
And then there is work. Part-time jobs in college are often necessary. However, it might pay off to focus on your studies, as a higher GPA might open up some scholarships as you make your way through school.
Minna Tian is a student at the University of Missouri.