Why Is Money Management So Important During College Years?

Becoming a college student is one of the steps that will lead us to our goals, as well as an opportunity that will shape us to become more mature and self-sufficient. Our "legal" age implies that we are expected to be able to make our own decisions and take accountability for them. As a result, we must live and behave like them.

College days often require us to go to new and unfamiliar places. This may seem strange, but I've wanted to go to college in another city since I was in senior high school. I'd love to challenge myself by living in new places and with new people.

But, little did I know, being away from family and loved ones really had to rely solely on myself. I must be able to manage my time between college and organizations, as well as my finances. Managing finances is an essential life skill. If we don't learn this skill, our allowance will vanish overnight. This could be a nightmare if it happens in the middle of the month, right?

So, how should we manage our personal finances?

1. Be An Observer

First and foremost, you must adapt to and observe your new surroundings. You can spend a month to gaining a complete overview of your daily needs. Make a list and keep track of all your potential expenses, whether they are for daily needs or only on rare occasions. It could be for food, clothing, transportation, laundry, groceries, or any other household utility. You can do it by hand, in Excel, or with any budgeting application. However, I recommend that you use a budgeting app, such as Goodbudget, to help you keep track of your monthly expenses. It may include a feature that displays a graph of your percentage expenses by category at a glance. In any case, go with the method that works best for you.

2. Be A "Priority" Maker 

You now have a long list of expenses on your hands. The next step is to distinguish between what is important to you and what is not. But, how exactly? There is no standard because everyone's needs are different. Consider the things that you can't get away from. If you ignore those things, you will experience a shortage. This allows you to identify your top priority need.

3. Be A Saver

We must be reasonable in how we spend our allowance. We can create a budget by allocating our allowance to our specific needs. However, under certain conditions, we must also be adaptable. Certain circumstances may cause us to be unable to stick to, or even exceed, our own budget. However, we must look for a solution by reducing the budget for other parts. We can take advantage of any promotions, receive discounts on certain events, and enjoy student benefits. You can also train yourself not to be an impulsive buyer by frequently comparing prices. Also, remember to stay committed!

4. Be A "Worst-Case" Planner

Nothing is more important than having a savings account. Needs that are not on the list can appear themselves in our daily lives. Therefore, we must have savings. You can open a savings account and use the money for anything you want: savings, emergency expenses, medical bills, you name it. It may be preferable if the bank account does not support mobile banking; it is best not to use it frequently.

In conclusion

Managing our finances requires us to be disciplined and consistent. If you are not consistent enough, you will never be aware of your spending habits and will never learn how to manage them. And I believe that practicing money management in your college years as a first step is a good idea because once you get used to the basic skills of money management, you will be able to maintain this habit throughout your life.

“Just because you can afford it, doesn’t mean you should buy it."

 – Suze Orman