Earning a college degree has never been cheap, and it seems to get even more pricey now. In order to cover all expenses and ensure high quality of life, students must achieve financial stability. But for many of you, this may sound like an impossible mission.
There is a common belief that achieving this goal only requires a high-paying job, which might be unavailable to busy and inexperienced students. However, the truth is that there is much more to financial stability than just having a job. In order to achieve it while in college, you also need to implement the right money habits. In this article, we will tell you about the top six rules of thumb that will help you get on the right track!
Find a Stable Income
Although money habits matter, of course, you need some sort of income before you can achieve financial stability. We know that when 100% of your time is busy with studies and homework, it can be hard to balance it all with working. But it’s possible. Sometimes all you need is to ponder “writing paper service” and find a trusted academic helper to delegate your current assignments. This way, you will be able to unload your schedule and get more time for making and growing your income while also not letting your grades go down.
Also, you can consider alternative sources of income rather than a full-time job that will interfere with your studies. Namely, you can work as a freelancer to be able to balance your schedule or run your own business. The opportunities are broad. You just need to find something that suits you.
Create a Budget
There is a common misconception that having an income (especially a high one) lets you cover all your needs and wants without a second thought. But the truth is that financial stability requires budgeting. No matter how much money you make. Thus, the second rule you have to learn and implement in your life is to always have a well-planned budget.
To create one for yourself, first of all, you need to start controlling your cash flow. You must know how much money you are making a month to understand how to allocate it to different areas of your financial life effectively. Then, you need to make a list of all expenses, such as necessary, discretionary, debt, college, savings, etc. Once you see the big picture of how much you make and how much you need to spend, allocate your funds accordingly. There are many budgeting systems that you can try. Also, there are many great apps that can make the process simpler. Most importantly, after you create a budget, stick to it at all times – this will be the start of your financial stability.
Set Some Goals
While budgeting will help you get on the right track with your current income and expenses, it’s not enough to ensure a stable and prosperous future. For this purpose, you need to start setting financial goals.
Instead of focusing solely on paying your tuition and rent now, think about where you want to be in a few years from now. Maybe, you want to purchase a car or home. Then turn it into a specific and achievable goal, and make it a part of your financial plan. That is, don’t just set a goal that you will purchase whatever you want one day. Instead, set a goal to set aside $5 every day to achieve your goal.
Although many students neglect its importance, an emergency fund is something everyone should have. Its core purpose is to help you withstand crisis or emergency situations without stressing too much or growing your debt. Besides, knowing that you have a fund for emergencies can make you feel more confident and stable too. So if you don’t have one yet, it’s time to build it.
Experts suggest that the perfect emergency fund should consist of the sum that will let you cover from three to six months of your core expenses. The number will be different for everyone. Thus, start by identifying your goal sum and make it a habit to save money for your emergency fund. Once you build it, don’t stop there and aim to grow it.
Saving is one of the keys to financial stability. You shouldn’t confuse it with building your emergency fund, as some people do. In fact, you need to have two different funds for emergencies and general savings that you will be able to use to achieve your financial goals.
To get started, open a dedicated account for your savings and make it a habit to add a certain amount of money to it regularly. Experts claim that the perfect savings plan implies saving 20% of your income every month. And here’s a tip that will make things much easier – instead of adding money to your savings account manually, enable automatic savings. Most banks will offer you such a feature and it can really help you make regular transfers to your account.
Lastly, in order to feel financial confidence and stability, you have to be more thoughtful about your expenses. Of course, as a student, you probably have to take care of many payments. The primary ones will include tuition and fees, accommodation, essay editing services, books, tutors, payments on your loan, etc. Together, all these things can cost you quite a lot, but these are the essentials that you can’t avoid spending on. Additionally, there will be many personal and unnecessary expenses too. Your goal is to prioritize your spending and make sure you spend money on the important things first.
While in college, many young people are living on a budget. This is neither new nor rare. However, the truth is that you can have a more financially stable life already now if you just integrate the right habits.
After reading this article, you have an actionable plan for feeling more confident and financially stable. Use these rules to improve your quality of life and achieve all your goals with ease!