Embracing financial discipline during young adulthood might sound like a big task to many. But the benefits associated with it have the power to make college students competent and independent enough to make sound financial decisions, both in present and future.
Financial discipline is about setting financial goals and controlling your money. This can be done by adopting better means to spend and save it. Learning this money management exercise does take time, but the earlier you start, the better your financial health will be. It teaches students how to make the most of their money. The first step towards this planning is to gain substantial financial discipline. Post that learn how to track the inflow and outflow of your money and benefit from it. Let us look at some steps that college students can take to instill financial discipline in their lives.
Understanding how to make and manage money is a vital aspect of financial literacy - College students can gain essential understanding and knowledge about money management through resources like trusted blogs, articles and journals. It would eventually help students in getting organized financially. You would no longer be a stranger to making smarter choices and taking well-informed decisions. Through financial literacy, you get your head around the goodness of savings and investing and other areas of finance. You learn to make small changes in your habits and lifestyle that could aid in meeting your present and long-term financial goals.
Also Read: Why is Financial Literacy Important for Students?
Budgeting can be an effective tool for college students to keep a tab on their income, savings and expenditures. It makes you systematic in managing your personal finance and working around the problem areas, if any.
It is good to set aside some time every month to list various expense heads like tuition fees, accommodation rent, food, loans, transportation costs, bills, and other lifestyle and daily expenses etc. and know the amount allotted to each. Through this method, you can assess the money being spent under different heads and learn about ways to make adjustments, if needed. It can be a good way of learning some great financial habits.
After the budget, you need to move on to the next step of regularly tracking your expenses to know about your income and expenses. You can opt for a daily or weekly evaluation to get a better view of your money matters. It would teach you to spend your money judiciously and cut down on unnecessary expenses.
Stick to the amount allotted to each expense head and make adjustments accordingly, if needed. You can also download apps for hassle-free tracking of your expenditure. All this would eventually help in avoiding overspending and getting organized with money and attain financial discipline.
Also Read: Why is Managing Monthly Allowances Important?
An important step to financial discipline is to understand that splurging once in a while is okay for college students. However, try to avoid making it a habit or weakness. It's good to track your spending weaknesses and try your best to rein in the problem. Figure out the trigger points that land you in trouble to work around them and steer clear of any overspending.
Keep reminding yourself about the focus of your life to stay on track by sticking to your budget. For instance, if you have assessed that a night out every week is turning out to be a financial burden for you, decrease the frequency of the event and utilize the time for some other purpose. Try out some improvement strategies to build good habits and enjoy life.
Start a savings account during college time to learn about the habit of saving money. Try to deposit some amount in your savings account at the start of the month. It doesn't matter if the deposit amount is too little because initially it is all about instilling a habit. The contribution should not come at the end of the month from what remains after spending. It should be the other way round.
Make that small contribution at the start of the month and then spend the rest. You might get tempted to use your savings at some point of time, but try to motivate yourself to be financially disciplined by reading and having a conversation with family members. Soon you will realize how this habit pays in the long run.
To start, students can opt for a savings account specially created for them - NuCash students account from neobank NuCash. By opening a bank account online through www.nucash.money , students can save time and effort and get associated with a simple and friendly banking experience.
Also Read: A Guide to PAN Card for Students
Financial emergencies can crop up anytime without any sign for which you need to prepare in advance. For college students, this can be in the form of a bill, a new laptop requirement or purchase of some books. These overhead expenses should not disturb your budget, so try to set aside an emergency fund for a rainy day. Do not spend this money on general financial needs. It is another way of developing that discipline towards becoming financially safe in your life.
You need to realize that financial discipline does not suddenly become a habit. You have to work on it from early years to make it a part of your life. These smarter decisions would only make you money wise and pave your way for a brighter future once you graduate and get on with the business of life.
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**Q. What is a savings account?
**It is an account in a bank or a financial institution where you can park your money and also earn interest on that.
**Q. What is a neobank?
**A neobank is an exclusive digital bank for which all financial transactions take place online because it has no physical branch. Customers can avail the bank services through their app or a smart phone or an internet-based device.
**Q. What is a budget?
**A budget is a plan that makes an estimate of the income and the expenditure. It also specifies the amount allocated to each purpose.
**Q. What is a “student account”?
**A Student Account is a type of savings bank account meant exclusively for students. Once a student completes or stops studying, the account automatically gets converted into a regular savings account.
**Q. Is there any tax paid for the interest earned on savings account?
**Yes, the interest earned beyond Rs 10,000 from a savings account is taxable under Section 80TTA of the Income Tax Act.