Money management is one of the most important life skills. If you approach this, together with how you manage your time, with the attitude of a lifelong learner who wants to improve, you’ll be sure to see progress in all other areas of life too.
The thing most people never take seriously about having control over their finances, though, is that the process must begin today. And if you do that while in college, you’ll be much better off when you enter the real world and can even start dreaming of a secure financial future for your whole adult life.
The very basics of finance, however, boil down to managing your expenses starting today, and also learning how to save, rather than spend.
These eventually become a way of life, and you won’t get into impulse buying, debt, or not knowing where your money goes every month. But students who aren’t forming the right spending habits early on, usually struggle with all of these. That leads to years of stress, financial insecurity, and not reaching their goals or starting the dream business.
Let’s not fall into the trap.
Below are the money-saving rules you should begin following this year, that will help you manage your personal finances well, and will open up opportunities to you that you never thought existed.
1. The law of saving.
Most college students would never ever follow this, as they aren’t really making their own money and thus don’t appreciate the effort put into this. So they just spend without thinking. And, unfortunately, take this habit with them after graduating.
But the very first money-saving rule each and every financial guru will teach you to consider and carefully think through, states this:
‘Pay yourself first.’
It comes from the book The Richest Man in Babylon by George Classon.
What this financial rule means is this: setting aside a certain percentage of what you make (or have, as a college student) each month, and not touching it.
To take this seriously, it’s best to open up a standard savings account and put the money there.
This teaches great discipline that stays with you forever. Yes, you can always withdraw the money and spend it on a big purchase, a short trip, or just nightlife. But by constantly saying ‘no’ to these impulses, you become a saving expert.
It’s a habit that requires willpower, but which can then save you a decade of sleepless nights, knowing you have a certain amount of money saved.
If you’re gonna be asking how much you should save, that would be 10%.
In fact, that’s the path to accumulating riches over the course of your working life.
Brian Tracy suggests you start by setting aside just 1% of all money coming your way monthly though, and slowly get to 2, then 3.
2. Start budgeting.
Budgeting isn’t something adults, or only businessmen do. It’s one of the most crucial money-saving rules to follow and applies to everyone’s financial situation.
It doesn’t matter if your parents are providing for you, that you have little expenses, or a part-time job and some money coming in. The point is to be the one in control of that, and a budget is the first step.
It’s easier than you think.
Simply track where your money is coming from (might not need this part if it’s just money transferred in your bank account weekly or monthly by family), and where exactly each dollar is going.
That’s key to then noticing some bad shopping habits, or to decide what changes to make when you begin saving.
A fixed budget must become your new best friend from your first year in college.
3. Avoid buying whenever possible.
Most of what we buy isn’t necessary at all. In fact, if you give each impulse buying moment some time, or if you look for other options, you can save a ton of money weekly and still live well.
Here’s what I mean and these must be added to your money-saving rules list that you’ll start following soon:
- when you need something for just one time, or for a short period of time, borrow instead of buying;
- when you see something online or in a store that you love, and are ready to make payment right away, don’t. Leave the site, or go home if you’re outside. Give it a few days. Then see if the urge is still there after that. Most often, it’s not and you realize it’s been a sudden craving;
- if it’s absolutely necessary to buy something, look for used items.
Believe it or not, even successful entrepreneurs are often following such money principles. It’s what has helped them get to where they are, but it’s also a mindset that stays with you forever.
4. Start earning while in college.
If you want to be independent, live more comfortably, and feel better about your financial situation, then it’s a must for you to start making some money right now.
If no one is making you do so and you receive enough money monthly to get what you need, you still need to take the initiative and decide to grow up today, instead of after graduating.
The freedom that you’ll receive feels like nothing else. You’ll be a step closer to living life on your own terms the moment you have your own income.
You might not be familiar with the options, but they are many.
There are a ton of online jobs for students, for instance. Which means you’ll have the change to be at home (even set up a home office and feel like a professional freelancer), have flexible times, and learn new digital skills while doing that.
Over time, you can start something on the side. We live in the best possible time to monetize any passion project you have, or to just begin writing for money, or anything else you feel like doing which people are willing to pay for.
What makes this one of the top money-saving rules, is that you always need to know you have side income coming in every month, to feel secure and to be able to set something aside.
What do you think?
And what’s your opinion on saving money in college? Have you been thinking of doing it? And how bad do you want to be financially stable sooner than others in your life expect you to be?