Guest post by Riya Rohtagi
Any student wants to be self-sufficient, especially when it comes to money. Of course, everyone understands that you must work to be economically independent at a young age. As a result, we will not advise you on where to look for a part-time internship if you are a student, as we believe the topic has already been discussed extensively. Instead, we’ll give you five effective spending and saving hacks to help you become financially independent. By the way, as an active student, you may find it challenging to complete all of your assignments. If you are short on time and need assistance with your projects, we recommend you seek finance homework help.
Attempt to avoid loans and debts
One of the most important tips for preserving and becoming economically independent is to avoid loans, credit, and debts. When you are young and do not have a family or career, it is natural to want to buy new clothes frequently, travel, and live your life to the fullest. However, do not take out loans to buy new sneakers or a purse. When it comes to money, be wise. It may appear simple to repay loans, but you will face numerous challenges in practice—some viable alternatives for debt categories, such as student loans. Consider applying for a scholarship. Scholarships are available in colleges and universities worldwide for talented students. Make every effort to obtain them.
Begin saving right away and set lofty financial goals
If you want to achieve financial independence as soon as possible, set realistic but ambitious goals. The most effective way to save enough money is to make it a habit. A working tip for those who use cash for daily spending is to put a specific amount equal to the amount spent on a particular good into the money box. For example, suppose you buy jeans for £16. Make sure to deposit the corresponding amount in your moneybox the same day. Another good option for credit cards is to set up automatic savings and deposit a set amount to a separate account every month.
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Keep track of your spending
Understanding the methods and reasons for your daily and monthly spending is critical. Make every effort to keep your monthly expenses as low as possible. We recommend using specialised apps to calculate your monthly budget and spending categories automatically. You can use your credit card history instead of downloading and installing additional apps. Some banks let you see diagrams of your spending divided into different categories. Food, pets, books and literature, rentals, utilities, car, hobbies, health care and medicine, insurance, and other types may be included.
Frequently use cash
Here is a simple and effective hack that will allow you to stop using credit cards without overspending. Make it a rule to only spend money on lunches, bars, gifts, hobbies, etc. Credit cards can give you the impression that you have lots of money when you don’t. When you spend money regularly, you will have a complete picture of your spending and financial flows. It will help you stay on top of your finances and avoid overspending.
Make wise investments
A financial independence tip is to diversify your investments. Because the expected return is lower than inflation, the savings account is probably the worst place to invest anything other than your emergency savings. Try to keep costs down (for example, prefer direct mutual funds over indirect mutual funds) because costs eat into your savings when compounded over time. Begin investing early in your career, and invest in a mix of debt and equity with a higher weightage to equity.
Continue to have fun
Finally but not least. Make sure your life isn’t dull because you don’t allow yourself to have some fun and relax. Participate in parties, travel occasionally, and remember that you must strike a reasonable balance between your savings goals and your daily life as a young and happy student.
Being an adult isn’t always easy. Managing credit cards, paying off student debt, and budgeting without the assistance of parents can be difficult. Financial independence does not imply severing all economic ties with your parents. Sharing expenses such as family vacations, subscriptions, or joint gifts may benefit everyone. Furthermore, many experts believe that family cell phone plans are a good idea because they are generally less expensive per person than individual contracts. That doesn’t mean you should expect your parents to cover the entire bill. Try to chip in for your share.
While attempting to become financially independent as a student you can also start pitching in for the rent of the accommodation you stay in. Many times you can afford it, but with student accommodation sites like Amber student accommodation, you can find affordable and pleasant homes in London and around the globe.