Whether you are a fresh graduate or a student, you must be saving your money for your future and immediate needs.
Sean Martin D. Plantado, head of customer service at Digido.ph, notes that one of the problems of the Philippine education system is the inaccessibility of higher education to children from socioeconomically disadvantaged families. As a result, many students do not complete their education or do not enroll at all because there is no money to do so.
Here are some saving tips for students and fresh graduates.
How can students save money?
● Learn the importance of budgeting for students.
Making a budget is a given and the most fundamental aspect of personal financial management. Students should begin budgeting as soon as they receive an allowance, and college students should already be adept at it. The 50-30-20 rule is a popular budgeting technique wherein 50% is allocated to needs, 30% to wants, and 20% to savings and debt payments. Budget your allowance based on your student needs. However, regardless of how you slice the pie, you should set aside a set amount of money each month for savings.
● Avoid unnecessary spending.
Indulging and spending more than you planned for your needs and wants is what ruins a well-planned budget. Before purchasing anything, reconsider the idea a few days or weeks later, and if you still want the item, include it in your budget. You could ask your parents to cover the cost or take a student loan, but that defeats the purpose of learning how to save money as a student. Furthermore, you will appreciate an object more if you worked hard to obtain it. Don’t be afraid to inquire if a business provides student discounts. They’re common in places near university campuses.
● Open a savings account.
The immediate benefit is that you can deposit your savings and keep them safe for emergencies. Keeping your money out of your sight is an effective way to make sure that your savings are not compromised.
● Track your expenses.
Keeping track of your expenses is one of the most effective money-saving strategies. An expense journal provides you with a detailed picture of your spending habits. Knowing where your money is going allows you to manage your expenses better.
● Invest.
When growing your wealth, financial advisors recommend supplementing savings with investments. If you think it’s too early to think about investing while you’re still a student, consider the investment rule of thumb. Invest early and in small amounts to get more. Invest late, and you may receive less even if you invest more.
● Do part-time jobs.
Having a side hustle can increase your cash flow so that you have enough to save and spend. Start earning using your talents, hobbies, and skills.
Saving Tips For Graduates
● Become knowledgeable about personal finance.
To be financially successful, you need solid personal finance fundamentals, and there’s no better time to start than now. If you want to learn about personal finance and be able to apply it in real life, there are numerous resources available out there.
● Budget and develop good spending habits.
After you graduate from college, your expenses will be different. You’ll have to deal with new costs. You’ll need money not only for rent but also for a security deposit. You will also be in charge of your bills, such as electricity, internet, groceries, and travel expenses. Make sure to have a budget and track your expenses using an app or pen and paper.
Spending habits are one factor that contributes to people’s financial difficulties. It is preferable to develop healthy spending habits from the start rather than having to break bad habits later on. Start by saving money by commuting through public transportation and eating out less frequently. Small efforts like these can save a few dollars on each occasion. However, if this is accumulated over time, it could amount to a substantial sum. Small savings will grow before you even notice it.
Live within your financial means. It’s exciting to get your first paycheck and spend it on things you like. However, such expenses will quickly deplete your budget and impair your ability to save money. Instead, choose a few restaurants, bars, or exercise classes that you’ve been wanting to try. Then, every now and then, try them out. Such luxuries are permissible as long as they are within your financial constraints.
Set aside a portion of your pay. Whatever amount of money you set aside, you must save some of it. When you start working, it is a good time to start accumulating wealth. It is preferable to avoid living paycheck to paycheck as soon as possible. Saving money will enable you to live more comfortably in the future.
● Get health insurance.
A hospital bill can bankrupt you before you even start making money, so it is essential to pay for health insurance especially if you are unemployed. It would be ideal if your new job provided health insurance. The earlier you obtain it, the better. Health insurance premiums will be lower for younger people.
● Start building up your credit score.
If you are planning to apply for loans in the future to start your own business, you must keep your credit score in check. Banks keep tabs on your credit and borrowing activities, and they make their decisions on whether to grant you loans later in your life and at what rates. Your credit score shows how much banks can trust you with the money they lend you, so it pays to have a good credit score. Don’t forget to pay your bills on time and avoid having debts that you cannot afford to pay. If you have student loans, pay them as fast as possible.
● Keep on investing.
When they have just graduated, few recent graduates consider investing. Many people believe that they must pay off all of their debts before they can consider investing. The reality is that you should begin as soon as possible. Time is an important factor in investing money. As a recent graduate, you have time on your side. When it comes to investing, time is your best friend. When you start investing at 30, you may need to save 2 to 5 times as much as you would if you started when you were just out of college. As a result, try to set aside some money each month for investing.
