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Golden Rules of Personal Finance Every Student Needs to Know
If you have a lot of financial responsibilities as a student, you need to think about how to pay for school, how to save money for the future, and how to manage your expenses. It can be tough to figure out what to do with your money, but you must learn as much as you can about personal finance. To be successful in life, students need to have a strong financial foundation. Unfortunately, too many young people graduate from college without any financial literacy skills whatsoever. This can lead to a lot of problems down the road. That’s why students need to learn about personal finance as early as possible. It’s never too early to start learning about personal finance. Financial literacy is one of the most important skills that students can learn. The sooner you start learning about money management and financial planning, the better off you’ll be in the future. That’s why we’ve put together a list of golden rules of personal finance for students. These rules will help you stay out of debt, save money, and make sound financial decisions throughout your life!
The Importance of Financial Literacy for Students
In today’s scenario, personal finance for students is very important. They need to manage their money properly so that they can save some money for their future. It’s a very difficult task for them to manage their money if they are not financially literate. Financial literacy is the ability to understand and use financial information to make better decisions. Therefore, students need to be financially literate so that they can make sound financial decisions.
The current scenario in Indian colleges is that personal finance is not given the importance it deserves. This is unfortunate, as personal finance skills are something that can benefit everyone, regardless of their plans. Money management for students can be taught in several ways, from simple budgeting tips to more complex investment strategies. No matter what approach is taken, personal finance for students is an essential part of preparing them for the real world.
What Financial Skills Do Students Need To Know
As a student, personal finance can feel like a daunting topic. There are so many things to think about – from tuition and textbooks to rent and groceries – that it’s easy to get overwhelmed. As a student, personal finance may not be at the top of your list of priorities. But learning how to manage your money now can help you avoid a lot of financial problems later on. Here are a few personal finance skills that every student should know. However, developing a healthy relationship with money is an important part of adulthood, and there are some key financial skills that every student should know.
Keep A Tab On Education Loans
When it comes to personal finance for students, one of the biggest expenses is higher education. In recent times, the cost of pursuing a college degree has skyrocketed, making it difficult for many families to afford it. As a result, more and more parents are turning to educational loans to help finance their children’s schooling. While an education loan can be a valuable tool, it is important to choose carefully. Parents should look for a bank that offers the best interest rate, moratorium period, and terms for repayment. It is also important to make sure that there is the option to repay the loan early, as well as the ability to make partial payments or prepayments on the loan.
While it may be tempting to go for a loan with a longer repayment period to lower the monthly payment, it is important to remember that doing so will ultimately end up costing more in interest over the life of the loan. Therefore, when taking out an education loan, it is important to carefully consider all of the available options to make the best decision for both student and parent alike.
Follow The Budget
A lot of college students are clueless when it comes to personal finance and money management. This is because they have never had to deal with these things before. Budgeting is the key to managing your finances properly. A lot of spending nowadays is happening because of peer pressure. Most people are buying phones, phone accessories, and gaming tools not because they need them but because all their friends have them. Students should try to make maximum use of discounts offered by stores and e-commerce sites. If you still have some money left over, invest it in something that will yield you good returns. By doing this, you will be able to save money and effectively manage your finances. Personal finance for students is an important tool that will serve you well throughout your life. Therefore, you must take the time to learn about budgeting and money management. This skill will be invaluable to you as you navigate your way through life.
Invest As Early As Possible (Impact Of The Time Value Of Money)
Between classes, homework, extra-curricular activities, and socializing, it can be tough to find time to think about your personal finances.
One of the best things you can do for your future is to start investing early. By making wise choices with your money now, you can create a strong financial foundation that will serve you well for years to come. Of course, there are always risks involved with investing, but there are also plenty of safe options out there. For example, fixed deposits (FDs) offer a great way to grow your money while minimizing risk. And if you’re looking for a higher return on investment, debt mutual funds could be a good option. National Saving Certificate (NSC) and Public Provident Fund (PPF) are other investment plans where students can invest their money. Personal finance for students has its challenges, but that doesn’t mean it’s impossible. With a little bit of planning and research, anyone can find ways to save and invest their money wisely.
Improve Financial Literacy
College professors are some of the most qualified people to teach you about financial literacy, yet this topic is seldom touched upon in high school or even college curriculums. If the majority of people knew what they were doing when it came to personal finance, then everyone would be rich. The truth is that lots of ‘experts’ give out false information on money matters, and many people don’t know where else to turn for help. So instead of trusting just anyone on the street, learn from those who know what they’re talking about by asking your college professors for assistance!
I believe that the best way to learn about financial literacy is by reading (or listening) to books on topics related to personal finance, investing, planning, entrepreneurship, etc. It’s a great way to spend free time and gain knowledge in an enjoyable method.
In my opinion, books are better than blogs, podcasts, or other online resources when it comes to learning about finance. Usually, a book has been revised multiple times and reviewed by several people before it is released to the public. The essential concepts of good financial literacy don’t change much over time since wealth accumulation has been occurring since ancient times.
Lastly, I advise that you take immediate action and don’t stop learning. Once you find an idea that works for you, apply it to your life right away.
Emergency Fund
In these uncertain times, personal finance has become a hot topic for discussion. Many of us have gone through tough experiences like job loss, business loss, salary cuts, and even bankruptcy due to the COVID-19 pandemic. This has made the importance of having an emergency fund a top priority for many people.
There are a few things to keep in mind when saving for an emergency fund. First, always calculate the amount which you want to save. Second, remember the 15:15:70 formula while saving for an emergency fund. This means 15% as cash, 15% as savings in a bank, and the rest as liquid fund investments. This will help ensure that you have a healthy mix of savings options to cover any unexpected expenses. Additionally, set a monthly savings goal for your emergency fund so that you can stay on track and reach your goal promptly.
Buy Insurance
Purchasing life insurance for college students might seem unneeded since most of them don’t have anyone depending on their salary. Yet, if you have student loans, buying life insurance while they’re still in school could be a good idea. Any financial responsibility you’ve taken on with your guarantor could leave you in some debt if the unthinkable happened.
Term life insurance is beneficial for college students because it only covers the insured for a set amount of time, rather than their entire lifetime. Therefore, it is more affordable and may be wise to keep while you’re still repaying student loans. After your term policy expires, you will no longer have to pay premiums, but you also won’t receive a death benefit unless you convert the policy to a permanent life policy. Thinking about getting term life insurance? You’re wondering how much it costs, right? Well, prices change depending on your and the insurance company’s health as well as your age. Though, in general, term coverage is more affordable than permanent protection.
Resources For Learning More About Financial Literacy
There are a variety of personal finance and money management resources available for students who want to learn more about financial literacy. Textbooks, online courses, and personal finance blogs can give students a foundation in personal finance concepts. In addition, numerous personal finance apps can help students track their spending, set budgets, and save money. Financial literacy is an important skill for all students to develop, and there are a variety of resources available to help them learn more about personal finance.
