Become a personal finance master in your college.

 

If you are a college student, especially if you are studying out of home town, then you most probably have to constantly grapple with money related issues in your day-to-day lives. Being situated out of home, receiving a fixed pocket money, the conundrum to spend it on livelihood or study related expenses, questions like: how to regulate spending, saving, the desire to do part-time jobs and internships are all which frighten college students like yours. Apart from academic expenses, many students also require some portion to be spent on recreation and exploratory activities too. However, such a desire becomes seemingly impossible having the shortage of money in sight. But, there is a great way to regulate your expenditure and align it with your academic goals; it just requires that you learn the personal finance skills which I have explained in this topic for you tailored specially for college students. Understand how money works, and you can make money work for you.

THE BASICS
There are only 3 things that you can do with money. They are:
1. Spend it
2. Save it
3. Give it away.

Take action:
Have a precise account of what you do with your money and where does it end up after a month. Once you have a detailed insight over your spending habits and requirements, you can quell all the wasteful expenditures and have an increased saving.

THE 50-30-20 RULE
This is a very simple yet effective way to manage your expenditure. Remember that it deals primarily with the various areas you should expend your money in. Although it is effective once you have a stable income but still you can use it to reach your financial goals in your college. The rule states that:
1. 50% of your expenditure should go to your NEEDS.
It means that you should spend 50% of your available money in a manner which satisfies all your basic requirements. The proportion can increase or decrease since you are in a college. It would still mean that about half your available pocket money should go to basic sustainable goods. They include:
1. Hostel/PG/Flat rent          
2. Transportation
3. Healthcare
4. Groceries
5. Books and stationery
6. Internet recharge and other bills

Once you have an account of your expenses on your needs then you will have an insight over your entire budget and where it needs to be spent upon. Now, spend the most on your NEEDS.

2. 30% of your expenditure should go to your DESIRES.

Desires are all the things that you wish to purchase which don’t contribute to your overall NEEDS. Examples can be:
1. Recreational activities
2. Movies
3. Parties
4. Alcohol, cigarettes etc.

It means that some amount should go to satisfy your personal desires, however, it shouldn’t be an extravagant expenditure. You should have an insight about what are your desires and whether they are really important or not. You can reduce your expenses on many recreational activities that eat up your time and money.

3. 20% of your expenditure should go to savings and paying debt 
The rule states that 20% of your income should be saved, invested or spent to pay debt. Since you might not have sufficient income in your college, the best idea is to SAVE your money.

Take action:
In order to utilise the rule to its optimum state, have an account of your expenditure and allocate the most proportion on your NEEDS. Then try to reduce your DESIRES and if you are able to SAVE money, it’s the most desirable state to achieve personal finance mastery.

HOW TO EARN MONEY IN COLLEGE
The most important thing in your college life which you can spend is your time. Hence, choose wisely what you can do in accordance with your time. There would be studies, ECA activities and other requirements academically, but still, there are various ways through which you can earn money. They are mentioned as follows:

1. Freelancing
If you have developed a special skill then you can freelance easily either by approaching the companies physically or applying to work online. There is a huge market for various professional skills such as:
 • Content Writing
 • Graphic Designing
 • Digital Marketing
 • Video Editing
 • Web Development
 • Android and app development etc.

First develop a specialized skill and then offer to work for companies which come to your college or online. You can apply to work online too on websites like upWork, LinkedIn, FreeLancer.com etc.

 

 

2. Teach a student
Offer personal tuition to children who are in their +2. If you have achieved about 95% in your Boards then you can always apply to tutor students who are going to give their boards. It is a great way to earn money and doesn’t require any specialized skills other then the ability to teach.
If you wish to apply offline, then get some pamphlets printed mentioning the details of your offer. If you wish to teach online, then its simpler. You need to register on various apps on Google Play Store or become a mentor on Unacademy.

THINGS TO AVOID IN YOUR COLLEGE

1. Multi-Level Marketing
In your college, you will receive various offers which will promise easy and profitable methods to earn money. They will require to sell certain products or services. It is called Multi-Level-Marketing or Network Marketing. Don’t fall for the trap. Many students and even adults have lost their fortunes on such schemes.

2. Gambling
Don’t fall for any expenditure which ask you to invest your money and promise handsome returns within a short time. Beware, they are either going to be invested in gambling or businesses that you have little idea about. Nothing in the world can promise you huge gains in short period of time.

3. Internships that drain your time
It is highly probable that you meet certain companies which are going to offer you internships and promise to pay you a good stipend. Remember that internships are not very specialized work that otherwise you would do as a regular employee of a company. What the company might pay to its employee for a certain work will always be more than what it offers to you. Don’t end up doing an internship that waste a lot of your time and don’t pay you what it pays to its employee for the same work.

There are no shortcuts to earn money in a short time. It takes time and skills to learn the art of saving and earning money. If you follow the above tips, then you are on the right path to become a master in personal finance for your college life. Good Luck!