Why You Need to Manage Your Finances: 5 Reasons
We all know that being a college student means being a broke adolescent with a stressful life. That is true for all of us that have been though college – it's just the way it goes. While noodle soups are delicious and being broke is “part of the student experience,” there are some precautions you could take in order to save yourself from feeling financially depressed during college.
You always hear adults talking about personal finances and how to techniques on coping with financial stress. While some students can afford spending their parents' money, for us, regular humans, it is harder to manage our own finances. I know how it feels to be bankrupt and lost, believe me. So check out my list on why it is important for you to manage your finances in order to avoid feeling this way.
Controlling your finances gives you a clear picture of your spendings.
If you keep a list of all the items you'll buy in the next month, I am sure you'll find out that there are some items that you don't actually use. Becoming aware of useless spending is what saves you from poverty. While your friends eat out daily, you have to be aware of how many dinners, lunches, and brunches you can afford. Too much of anything is harmful, so make sure you balance your spending properly.
Budgeting will help you achieve your long-time goals.
We all dream of that one thing we cannot afford, and we all imagine the moment we will actually own it – “what am I going to do with it? How am I going to use it? My friends will be so jealous.” It might be a new laptop for gaming, a photo camera, or a new make-up set. It might be traveling or saving up for a heritage trip to Israel. Regardless of our intentions, we all want to achieve our goals. Budgeting will help you achieve yours faster.
The sooner, the better.
Unless you have an absolute desire to live on the streets after college and have no children, you will have to learn how to deal with finances sooner or later in life. My mind set is “the sooner, the better.” It is never too early to understand how things work in real life. That way, you will realize what is actually worth spending money on from an early age. You will also learn about how the tax system works, which will be a beneficial tool to have. Most adults don't get it yet, so you're lucky you're reading this, trust me.
Learning about later investments is crucial.
As a student, you should know everything about car loans, first-time home investments, or risk evaluations before graduating. You will have a better perception on what is happening in the world if you comprehend some of these mechanisms. It will lead you into taking better choices, being more pro-active and involved in your community, and it will give you the chance to help your friends whenever they need to. Being the smart one in the group is fun, isn't it?
Understanding the difference between useful and useless is useful.
While some investments are heaven on Earth, there are so many other that people do not actually need. I know I've talked about poor investments before, but highlighting this point again is crucial for me. Making good choices later in life is based on things we learn while we are younger. If we are used to spending $200 on clothes every two weeks, there is no way we will be able to save money. Those $200 will turn into $400 as soon as our pay checks increase their zeros, and that will leave up bankrupt again. Even if we are considered mature enough to take rational decisions, we have to pay attention to what decisions we take and question them.
Budgeting will help you improve your credit and avoid debt, as well as understand basic concepts of finance. Being fully aware of your economic life will help you reach your goals, and will be a good asset for your adult life. While spending money on little pleasures like ice-cream or Taco Bell is not always wrong, you have to put an end to it if it becomes a habit. Too much of anything is harmful as I've aforementioned, so make sure you keep your life balanced and your decisions smart.