FINANCIAL MANAGEMENT TIPS by Kymani Shaw, FSS Guild Student Representative
Hello FSS Pelicans, It is of great honor and pride that I share with you some of the different ways we can all manage a healthy financial life while being a university student. Starting university can certainly be an exhilarating experience for many, a bit terrifying for some, and for others, it is a mixture of both. Being a university student at first has its difficulties as it is the very first time for many students that they are leaving the comfort of their homes and operating without their families’ physical support. While starting this new journey, one of the main challenges that students will face is how to practice effective financial management. This may seem simple to do at first but when you are now placed in a position where it is a requirement for survival, you now realize it is a bit more difficult than expected. Effective financial management is about organizing your priorities, budgeting your income and expenses, and adapting to that financial plan for a specific period of time. However, for many students, the income we would have usually gain came from our lunch money which, most students no longer receive due to us now attending online classes from home. Students now have to resort to working part-time online jobs in order to help purchase food and cover other expenses. Though not an easy task, it is very much possible to effectively manage your finances with the right practices. Here are some key points on how we can achieve this:
Get to know your spending habits. This should be one of your highest priorities as this is key to aiding us to strengthen our financial management status. We can begin by keeping track of all the things we’d usually spend our money on. This can be done with the use of a spreadsheet on Excel, a budgeting app, or by simply keeping track through the use of your notebook. Also, think about how you are being financed right now during the pandemic and how you will be financed when you move to university. Perhaps you are receiving an allowance, lunch money or maybe you are working a part-time online job that helps to cover your expenses. Will you be able to continue working that job, or will you need to find a new one once you’re on campus? Becoming familiar with your current spending habits and your source of income can be extremely beneficial in improving your financial management status.
Organize a list of your essential and non-essential items. Now that we understand our spending habits, we should now break those down into essential and non-essential spending. As university students, we need to understand and separate our needs from our wants in order to know the different areas we should spend our money on and the quantity that is required. Essential items are things that we need for our everyday living. These include food, shelter, masks, clothing, toiletries—and, for our education, books, laptop, etc. Non-essential items are products that you do not need for everyday living, such as a new watch or air pods. They are items we would like to have but they are not needed. Having this list separated and embedded in our budget can significantly help us to balance our income and expenses. At first, it may be difficult to adjust, but with time and effort, you will begin to see the positive impact this will have on your lives.
Create a feasible budget. After organizing a list of the goods/services you need from the things you merely want, we now move on to creating a budget based on that information. A budget is a financial plan which estimates your income and expenditure for a specific period of time. This should cover your regular, ongoing expenses as a student such as meals, food, utilities, plus any one-off or special costs and connecting those expenses to the level of income you have. This will reveal which money holes you need to fill, and whether or not you have any income remaining to finance your leisure activities. You will also get a clearer idea of your income and how you can divide that to meet your necessary expenses. Think of your budget as a personal commitment to yourself so creating one is simply not enough as you should also practice sticking to that budget. You can create your own budget with the use of an Excel spreadsheet or with an app on your regular app store.
Start an emergency savings fund. As we navigate through life, we will always come across unexpected financial circumstances that may place us in difficult situations. This is where an emergency savings fund can become very useful as it can serve as a safety net that you can fall back on for those whenever facing a financial crisis and in need of some support to put you back on your feet. What qualifies as a sign to use your emergency savings fund will tie back to what we spoke about earlier which as your essentials, non-essentials, and how high those may be on our list of priorities. Pelicans, university life can certainly be a new experience for many, but it does not have to be a difficult one. Being proactive and taking the necessary steps to achieve a strong financial status while attending university is a huge step towards a life filled with success and financial empowerment. So, I encourage you all to make the right decisions from now on so your future self will be grateful. Continue staying safe, focused on your goals, and striving towards financial independence.