Upon entering college or university, students will be faced with a new phase in their lives where they are responsible for every action they do. Without paying attention, managing money can be difficult for individuals that haven’t been in control of their finances or exposed to surplus funds. Here are some quick tips on managing money as a freshman.
Written by Ethan Zamora
Create a Budget
Creating a budget is an essential building block for managing your money. Your budget should be realistic and should account for all the activities you plan on participating in.
Before creating a budget there are some things you should account for:
Income:
Work income
Scholarships, grants, and bursaries
Financial support from family
Your savings
Expenses
Essentials (the minimum spending allowance): groceries, rent, utilities, laundry, etc.
Excursions/Events: eating out at restaurants and cafés, concerts/shows, travelling, gifts, etc.
Emergency Funds (any unexpected events that require large amounts of money): loss of employment, dental work, broken vehicles, etc.
Keep Track of What You Are Spending
Another key factor to manage your money is to keep track of where your expenses are going. After all, it is easier said than done to stick with a budget once you have created one.
Keeping track of your money will not only help you stay within your budget but also help you see holes in your budget that you can fix.
Some things to keep track of:
Is the majority of your money going towards essential items?
Is there one item or area that you can save on?
Are you reaching your monthly budget goal?
Manage your credit
If you use credit cards to pay for your expenses, make sure to pay your bills on time and in full to prevent building up interest fees.
If you don’t use a credit card and you are considering getting one, post-secondary education is a great time to start. Several benefits that come with using a credit card include:
Building your credit score for future purchases like houses and cars, or for receiving loans from financial institutions
Differentiating between necessary items and luxury goods
Becoming accountable for paying your bills on time
Invest in other saving accounts
Your budget should dictate how much money you can spend during the duration of your budget. Any extra money is “out” of your budget and should be put into a savings account to ensure a buildup of financial support when needed.
Excess money can be put into a tax-free savings account (TFSA). TFSAs are incredible vehicles for saving, as you can put up to $6,000 into any investment without paying taxes, including bank accounts, stocks, index funds, guaranteed investment certificates (GICs) and more. This way, you will not be tempted to spend any extra money you may have on hand.
If you put your money in an interest-bearing account, you can grow your money as you leave it alone due to compound interest. This will help grow your overall savings, improve your financial health, and help pay your tuition and other expenses as a student.
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