Nowadays it is much harder for students to have even a hint of financial freedom with college prices skyrocketing and the pool of potential employees expanding, thus, increasing competition. An image of a 20-something guy/girl living in a basement has already become a meme for some and a harsh reality for the others.
However, being a student does not mean that you are doomed to be poor or forever dependent on your parents. There are some smart tricks which should help you become more financially sound and less economically plagued.
Tip # 1: Have Multiple Sources of Income
It is crucial not to keep all your eggs in one basket. The truth is that even if you have a stable and successful career, you will never know when your boss decides to move the office to let’s say India. It is no secret that more and more companies are outsourcing their businesses overseas seeking to minimize the staff cost and maximize the revenue.
Today’s world is very dangerous and hectic. Thus, it is important to devise a Plan B in case your carefully crafted scheme falls through. It is a good idea to do some freelance work on the Internet platforms and gain some clients. You do not need to bury yourself in work, just keep in touch and contribute to their projects from time to time. It is just a way to ensure that you are equipped with the life vest in case your ship sinks, and you have to swim ashore on your own.
Tip # 2: Spend Less. No Matter How Much You Make
Even if you are currently enjoying the benefits of the upper middle class, it is just common sense not to expect it to last forever. I do not mean to sound pessimistic, but your fickle stability may trick you into thinking that it is eternal. However, this is not the case, and you should always be ready for any financial predicament that might mar your ostensible well-being.
Even if you are a millionaire, it is easy to lose the money you made if you do not treat it carefully. Consider every big and small purchase. Do not just rush into shopping without any valid reason. It may sound boring, but believe me your future self will thank you.
Tip # 3: Try Some Investing
Unlike the popular stereotype, investing is not just for the rich. Anybody with the brains and a bit of money can do it. The key here is to be smart and not to put your money into risky enterprises. Buy bundles rather than single stock, and enjoy that interest payment.
Tip # 4: Make Saving Automatic
The best way to ensure that you are actually saving is to let it happen without your direct involvement. If a certain percentage of your weekly payment is automatically deducted to your savings account, you will be less tempted to use that money for other, less sensible purposes.
Humans are very impulsive creatures, and it is not uncommon for them to be guided by their emotions rather than reason when making purchases. Marketers know this all too well, and they will use your weaknesses against you. Prevention is always better than cure, and you will save time by not buying that new brand dress in the first place rather than returning it three days later after realizing your mistake.
Tip # 5: Have a Couple Savings Accounts
This is a tip for those who cannot use Excel sheets. Normally, it is more comfortable and advantageous to have one savings account, but if you have multiple reasons for accumulating money, it makes sense to do it separately.
So, let’s imagine you want to buy a house, go on a trip and save for retirement. You will be able to track your savings on all those goals much more efficiently if you set up separate accounts for all three. However, again this is a tip for the lazy ones. If you are good with the Excel sheet, just ignore this advice and read further.
Tip # 6: Visualize
I know it sounds silly, but the power of visualization has been corroborated by much scientific evidence. Besides, it does not take a lot of time and effort – just a bunch of pencils and a dab of creativity.
So, if you have always dreamt to go to some pretty islands in the middle of the ocean – print out their pictures and fit your face in there. If you strive to buy a cute little house – well, you already know the procedure. For the retirement fund just use a flag of Florida. Seriously, jokes aside, you need to imagine yourself achieving those goals. It is hard not to default on long-term commitments and deny instant gratification. Your goals have to be truly important to you to persevere in this difficult enterprise.
Tip # 7: Invest in Yourself
The best way to make a decent paycheck is to get a decent education. Of course, nowadays even having a degree is not a guarantee of a stable employment. However, if you are not a computer genius or a rising YouTube star, perhaps, a traditional 4-year institution is just what you need.
In any case, it is always a good idea to get some additional skills and boost your credentials. Money will come and go, but your qualifications are always going to be with you. So, do not save up for a trip to Europe, but focus on making yourself hirable and marketable first. Investing in yourself is the best decision you can make, especially when you are just starting your adult life.
Tip # 8: Value Your Time
Sometimes people would jump to insane saving decisions which, however, do not make a huge difference. In fact, sometimes the time you invest in such activities just to have some extra dollars is counter-productive and drains your budget, rather than fills it.
You need to always think of how much you save in relation to how much you earn. So, for instance, if you decided to take a train instead of flying, calculate how many working hours you lose choosing this option instead of a fast jet. Then estimate whether the cost you incur outweighs the sum you could have made if you spent those precious minutes in the office rather than in a stuffy compartment. It is not always good to save. You need to take a smarter approach to this issue.
Tip # 9: Start Early
Being a teenager is not an excuse to handle money haphazardly. Once you hit 18, it is time to treat the matter seriously. The earlier you start saving, the more you will have for the retirement.
Of course, it does not mean that you have to discard all the good things in life and just exist. Sometimes going on vacation or buying a pet has such a huge value for your health and emotional well-being that it is okay to lose some of your savings. However, there should be rules, and those rules should be violated only in the exceptional urgent circumstances.
Tip # 10: Don’t Be Ashamed!
Because of the social media, many students are becoming increasingly concerned about the quality of their lives in comparison with their more affluent friends. They might feel miserable or even ashamed of themselves when saving money rather than having it all.
However, just remember that being rich as a student is an exception, not a common occurrence. Just look around, and you will see many people like you. You are not alone.