While you may be looking forward to burying your nose in some books and getting your learning cap on, many students forget that there’s a lot of financial literacy you’re going to have to brush up on.
Do you have a budget?
Or are you just spending on the go?
University and college are expensive, and there are endless opportunities to spend your hard-earned income or your student loans.
By making some small changes in your life, you can save yourself a lot of money over time.
Here are some tried and true recommendations for students looking to save money.
Table of Contents
Budgeting
Making a monthly budget is the first step towards staying on top of your finances.
Budgeting gives you a larger picture of your money, so you can make informed spending/saving decisions.
It helps reduce the amount of debt you have once graduated, because, trust us – you don’t want to enter the working world with a massive debt looming over your head.
Create a spreadsheet and compare your income and expenses for the next six months to a year.
Are you in the green (income is greater than your expenses)?
Great!
Make sure you’re also saving money each month – 10-20 per cent if you can.
If you’re in the red, however (expenses greater than income), you’ll need to think of ways to reduce your spending or increase your monthly income.
CNBC lists some of the top budgeting tools for 2023 that you can use as a reference.
Track your spending
Write down every purchase you make or utilize a budgeting app to track your monthly spending.
Simply tracking what you spend can help you notice patterns and make you more aware of where your money is going, subsequently helping you identify if you need to make changes.
Kingston’s Jason Hare, CFP, H.BScOD, with Cornerstone Wealth Planning Inc. provides financial guidance to a range of clients.
He has spent years honing his financial knowledge and now helps others to create and maintain a financial plan for their future.
“I think financial planning can seem extremely daunting to young people going into post-secondary education. There is already a lot of pressure to succeed and level yourself up to the next stage of your life,” says Jason Hare. “However, many students go into their education with the mentality of ‘being a broke college student’. While this is often true and no one expects you to be rolling in money as a student, you don’t have to go through your entire educational career worried about where your next meal is coming from. With careful planning and, you guessed it – education, you can mitigate a lot of financial speedbumps while you navigate this new chapter in your life.”
Differentiate between needs and wants
Not to sound like a ‘boomer’, but there’s a difference between needing water to live versus wanting an $8 dollar mocha frappuccino to function in an early class.
While it may seem like a relatively simple distinction, you would be very surprised at our ability to justify certain spending decisions.
Saving money by buying only what you need, you have more flexibility in your budget in the long run.
Of course, it’s totally okay to treat yourself – just make sure you’re staying within budget.
“A lot of personal finance comes down to habits we’ve developed over time,” says Hare. “If you grew up relatively well-to-do, you may be used to living a certain lifestyle that you want to continue to maintain. On the other hand, those who grew up not having as much may be less prone to spending on things they see as unnecessary. Regardless of where you come from or where you developed your habits, being aware of them and adjusting your financial plan to address them is a must.”
Stick to the budget
Making the budget is the easy part – the more difficult part is putting it into action.
Remember: a good budget is not a permanently fixed plan. On the contrary – it’s meant to be quite dynamic. So, be sure to update it when things change.
“Financial plans need to be fluid to adapt to wherever you’re at in your life,” explains Jason Hare. “Don’t be afraid to revisit a plan when things change.”
Food and groceries
Besides paying rent, your biggest monthly expense is likely going to be food.
While eating out all the time is by far the easiest option, it’s also the most expensive.
Adopting a do-it-yourself attitude when it comes to food consumption is a smart way to save money and improve your cooking skills.
“It may seem intimidating to focus so closely on your finances when you’re a student, but it will benefit you greatly in the future,” says Hare. “If you have the opportunity, check in with a financial professional to help guide you in the right direction.”
