Financial literacy for a student

Financial literacy is not  a part of curriculum in school or university. And it’s a pity. When a student has the first money earned, there is a dilemma what to do with it. Maybe buy clothes or spend on college paper writing service. Today we talk about the basic rules of financial literacy.

Financial literacy for a student

Increase your erudition and set goals

Start reading books or articles on financial literacy. Today, everyone is familiar with someone who has received an education in economics and can provide this or that help. It is also useful to attend various seminars on effective budget management.

When implementing your plans, goal setting is key. The list of goals (for example, buying a new computer, car, phone, saving money to buy a home) should be recorded and kept in a prominent place. Once written down, they are harder to forget: in this way, your financial plans will be consistently aimed at achieving goals. Every 6 months, review the list of goals and analyze how close you are to achieving them, or change your desires and add new ones.

Implement your financial plan on a monthly basis

Prepare a list to track your financial situation and divide it into two columns – income and expenditure. Calculate how much income you will receive – this includes scholarships, income from part-time work, pocket money. Plan your budget on a monthly basis, within which you will spend money during the month. Expenses should be below your total projected income. The budget must contain: 1) a forecast of costs and revenues for the week and month; 2) approximate level of income during the year; 3) stock “for a rainy day” (in case of unforeseen expenses, such as repair or replacement of a computer or mobile phone, travel; illness; purchase of sports equipment); 4) savings: determine how much you can save each month – even if it is 10, 20, 30 euros, before the end of your training will be a decent amount.

Start with a positive balance in your account. Earn a stock of your monthly budget. Start realizing your long-term goal only when you earn an amount equal to your budget for a few months, ideally half a year.

Many financial advisors recommend allocating their funds as follows: 50% of the funds should be spent on basic necessities and related expenses (rent, tuition fees, etc.); Spend 15% of money on non-standard living needs (buying a car, traveling, going to the movies, etc.); 15% of funds to invest; 15% – put in reserve.

You can track and plan your budget using one of the mobile or desktop applications.

Consider the frequency of costs

All the expenses you incur within your budget can be divided into three groups: periodic (ie from time to time), monthly and weekly.

Periodic: tuition fees, purchase of educational literature, furniture, utensils, clothes, shoes, subscription to magazines, car registration; payment of medical insurance, payment of a training course or library subscription; buying a gift for a friend; vacation expenses, buying tickets for events.

Monthly: rent, bus or train fare, mobile, TV and internet, fitness center.

Weekly: purchase of food and personal hygiene items.

Prefer cash and avoid “credit cards”

If you use cash to pay, you will get a clearer idea of ​​the costs than when paying with bank cards. Try not to pay by credit card: in case of non-cash payments, it is better to use debit bank cards so as not to spend more money than you have in your account.


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