Managing your finances as a campus student.
As a campus student, you may have different sources of financing. The basic source of provision may be your parents/guardians. There is the Higher Education Loans Board (HELB) loan that is open to any campus student. However, the qualification for the loan is subject to assessment and approval by the HELB board. Thus, a few individuals may miss out on the HELB loan. Some students are also beneficiaries of bursaries, scholarships, or some who are even financed by well-wishers. Nevertheless, some students derive their finances from running their own businesses. In all these, one thing is clear: there is a need for one to manage their finances well to avoid an unnecessary struggle to make ends meet. There exist basic ways of ensuring that one optimizes their finances effectively to live within their means.
1. Have a budget
Having a budget is important because it helps one to separate wants from needs. A budget is also crucial in enabling one to know where their money goes and how much they spend. Essentially, a budget helps justify one’s expenses against their income. In a student’s scenario, one achieves a surplus if they live within their means, and one is said to have a budget deficit when they live beyond their means. As a campus student, the initial step in drafting a budget entails starting with the basics, namely, stating all the possible sources of your income and then stating the necessary expenses (needs). With the current fast-paced life, it would be necessary for one to maintain a weekly budget. A basic budget has the income amount at the top followed by a list of expenses.
2. Work with a daily maximum spending limit
Having a daily maximum spend or limit is crucial in ensuring that you manage your finances well. A daily limit tames your tendency to overspend. It helps keep your finances in check. Fundamentally, the daily maximum spend limit apportions your finances against time. For instance, you may have intended to spend 1,500/-. This would imply a daily maximum spending limit of 200/- with the rest going into savings. The limit is vital in training you on how to plan your finances daily. In our example above, you may apportion the 200/- for food and other necessary daily expenses such as transport (for those living far from campus) and airtime. Hence, a hypothetical apportionment of the 200/- assuming the student lives within or close to the campus premises would be breakfast – 40/-, Lunch – 50/-, Supper – 50/-, miscellaneous/other expense – 60/-.
3. Track the expenses
Tracking the expenses entails using automated or manual methods of knowing where your money goes. The automated way may entail having a mobile app where you key in your expenses every time you spend money on something. The manual method entails writing down pen-to-paper of each of your spending. Tracking expenses is crucial in enabling you to know whether or not you are living beyond your means. It also helps breed a financial discipline where you become conscious of how you spend your money. Over time, you can track where you spend most of your money. If it is unhealthy, you are in a better position to make the necessary adjustments towards using your finances effectively.
4. Save! Save! Save!
Saving is one of the crucial principles in money management. Saving creates a consciousness whereby one lives with the attitude of caring for tomorrow. I am sure by now that most of you have heard of the importance of saving for a rainy day. Besides enabling you to have cash for a bad day, saving is crucial in enabling you to set money aside to pursue individual investment projects or purchase important items. Hence, there are different motivations for saving – one may save for a rainy day, to invest, or for personal purchases. There exist various tools to enable one to save their money. The basic one is M-Shwari. As a campus student, you may decide to save 10% of every amount that you get to M-Shwari. You may have a monthly lock savings account where you deposit the 10% and unlock it at the end of the month. Over time, the little effort of saving 10% will amount to something great, and thus you may never be in a cash crisis if you learn the art of saving.
5. Tame your appetite
There is a tendency to desire to be fashionable while on campus, even if your finances do not allow you to be so. Hence, many comrades sink in debt at the expense of appearing trendy and being in the know. However, you do not have to live beyond your means to appear rich. There is a quote that goes as, “Rich stay rich by living like they’re broke. Poor people stay poor by living like they’re rich. Act your wage.” Here, the emphasis is that you ought to live within your means, and an effective way of doing so is by taming your appetite. The most basic method of taming your appetite is by asking yourself this crucial question each time you want to spend your money on something – do I really NEED it, or do I WANT it? Remember, you cannot do without a need, but you can do without a want. Thus, to tame your appetite, distinguish between needs and wants.
Managing your finances requires discipline. Do not spend your money trying to impress others. Just live within your means, and over time, you will never feel the pressure of lacking finances to accomplish something. Remember, being disciplined requires initiative, and it takes time to establish a healthy financial lifestyle. Thus, begin today to operate a budget, set daily spending limits, track expenses, save 10%, and tame your appetite.
Have a healthy financial lifestyle in 2021, won’t you?