Even though money and their use seem to be an easy ordinary thing, this is not quite the case in reality. In practice, some people often face the problem when money, as they say, slip through fingers, while others, with a similar level of income, even manage to save up. It’s all about financial literacy, which protects your budget from the deficit. So, what should be done to achieve this effect?
– Improve your knowledge and set goals.
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Start reading books or articles about financial literacy. Today, everyone is familiar with people who have received a degree in Economics and can provide certain assistance. Attending various workshops on effective budget management is also helpful.
Setting goals is of key importance when implementing your plans. The list of goals (for example, the purchase of a new computer, a car, a phone, putting off funds for the purchase of housing, etc.) must be written down and stored in a visible place. Once written down, the ideas are harder to forget. In this way, your financial plans will be consistently aimed at achieving goals. Every 6 months, view the list of goals and analyse how close you are to achieving them, or change goals and add new ones.
– Implement your financial plan monthly.
Prepare a list to track your financial condition and divide it into two columns – incomes and expenditures. Calculate how much income you will get including scholarships, earnings from part-time work, pocket money. Plan your budget each month to find out how much you spend. Expenditures must be lower than your total projected earnings. The budget should contain: 1) a forecast of expenditures and earnings for a week and a month; 2) approximate level of income within a year; 3) rainy-day funds (in case of unforeseen expenses, for example, repair or replace of a computer or a mobile phone; travel; illness; purchase of sports equipment, etc.); 4) savings – determine how much you can save every month, even if it is 10, 20, 30 euros, a decent amount will be accumulated by the end of your studies.
Start with a positive balance on your account. Save an amount equal to your monthly budget. Start implementing long-term goals only when your savings reach the amount equal to your budget for several months, ideally half a year.
Many financial advisers recommend allocating money in the following way: spend 50% of your funds on basic life necessities and the expenditures associated therewith (rent, expenses for studies, etc.); spent 15% of the funds on non-standard life needs (car purchase, travel, going to the cinema, etc.); invest another 15% of your budget; and the rest 15% should be saved up for a rainy day.
You can track and plan your budget using one of the mobile or desktop applications.
– Take into account the frequency of expenses.
All expenses that you incur within your budget can be divided into three groups: recurrent (that is, on a case-by-case basis), monthly and weekly.
The recurrent expenses include tuition fees, purchase of textbooks, furniture, dishes, clothes, shoes, magazine subscriptions, car registration; payment of health insurance, study course or library subscription fees; buying a gift for a friend; vacation expenses; buying tickets to events.
Monthly expenses include accommodation charge, bus or train tickets, payment of mobile communication services, television services and the Internet, payment of fitness centre services.
Weekly expenses include purchase of food and personal care products.
– Preferably use cash and avoid credit cards.
If you use cash for payment, you will get a clearer idea of expenses than if you pay with a bank card. Try not to use credit cards. In case of making non-cash payments, it is better to use debit bank cards in order not to spend more money than you have on your account.
How to always keep net positive: useful tips.
Compliance with all the above recommendations will help you learn how to manage your student budget effectively. This skill, in turn, will be a good help in your future professional activity, in which self-discipline, planning and rational use of funds are important criteria for success.