We have come a long way in every aspect of our lives. Everything is getting more advanced including technology, lifestyles, education, etc. Still, if you look at the stats provided by the GFLEC (Global Financial Literacy Excellence Center), it shows only 35% of men are financially literate. In comparison, this number shrinks by 5% for women positioning it to 30%. Now, the question is, whom to blame? We believe education systems need some refinements. However, since we can not do it, we should try the other way: teaching college students the importance of financial literacy and how they can do it.

1. Why Financial Literacy Matters?

Well, there are various reasons for that. Let’s discuss them in this section of the blog.

1.1. Prepares for Financial Independence

While in college life, it doesn’t bother students that much, it becomes a challenge the moment they step into the professional world. This transition in their lives from where financial support used to come from parents or guardians to the scenario where they become responsible for their finances can be undoubtedly hard for them. Having financial literacy can make this transition easier and help them manage their money without struggling.

1.2. Reduces Financial Stress

Once student life gets over, so many challenges just showers at students which makes them feel stressed. One of the biggest ones is the financial stress. If students learn about how to do financial planning in the college itself, they will be able to avoid this part. Besides the number of adulthood challenges, they can still overshadow them if they learn how to handle money.

1.3. Builds Healthy Financial Habits

We all have been students and are well aware of how unwisely we spend money on things that we even do not need. Later on, we realize that it was a huge mistake. To avoid this regret, you might want to build healthy financial habits. Learning about how to save, invest, and understand credit will help you in the long run.

1.4. Avoids Debt

Remember, debt is the killer of all happiness. Hence, make sure you avoid it as much as you can. But it is impossible to do if do not have financial literacy which is another reason why it matters the most. It will help you make informed decisions about borrowing and spending, a skill that not a lot of people have. A good mechanical engineering homework can teach you how to do it.

2. Budgeting Tips for Students

Now, that you have an idea why financial literacy matters, it is time to provide you with some budgeting tips. For that, you will have to note down the important points we are about to discuss in the next few subheadings so it does not slip off your mind. 

2.1. Create a Monthly Budget

The first thing you need to do is track down income and expenses carefully. Open your Note app on your mobile or take a sheet of paper and start listing out all the sources of income, such as allowances, part-time jobs, or scholarships. The next thing you need to do is detail your monthly expenses including rent, utilities, groceries, and personal items. Make sure you do not miss anything when listing both of these. Till this stage, you will have enough information to create a budget that ensures your spending doesn’t exceed your income.

2.2. Prioritize Needs Over Wants

Another thing you need to know is the difference between necessities and luxuries. If something is just that you want but do not need, try to avoid spending on it and save the money. By doing this, you will have a portion of savings that you can use on other important things that may arise like textbooks, emergency repairs, etc. Having this approach can help you build a good financially stable future. 

2.3. Use Budgeting Tools

If you are not good at budgeting, don’t worry no one ever is in the beginning. In this scenario, you can use take advantage of budgeting apps and tools available on the internet. These tools are designed to help manage finances with ease. 

Here is the list of some best budgeting tools available:

1. YNAB

2. Goodbudget

3. PocketGuard?Budget Tracker App

4. EveryDollar

5. Fudget

6. Honeydue

7. Monefy

2.4. Avoid Impulse Purchases

Impulse buying can vanish your money in a flash and later you will realise what have you done. Notification of food delivery and shopping apps encourage this a lot nowadays. Their marketing strategy is sending you quirky and cosy messages that can convince you to buy things you do not need at all. Make sure that you do not be the victim of such tactics. Whenever you are about to hit that “order now” button, ask yourself if it’s something you really need or just want it and make the decision accordingly.

2.5. Look for Student Discounts

In many countries, there are many well-established student discount programmes from which students can benefit a lot. Do thorough research about the student discount in the region you are studying and take advantage of these opportunities to save money on everything from meals and entertainment to software and transportation.

2.6. Review and Adjust Your Budget Regularly

The financial situation may fluctuate especially when you are a student as there is no stability at this stage of life. So, you need to do a review and adjust your budget at least once a month. And not only in student life, this approach will benefit you a lot even in the future so make sure you learn to do it effectively.

Final Words

Financial literacy is an essential skill for everyone to have. If you can develop this in your student life, no one can stop you from having a financially stable future. Firstly, you need to equip yourself with the knowledge of why it matters and then follow the steps we have shared with you in this blog. Remember, the habits you form now can lead to long-term financial success and peace of mind. Start budgeting today to secure a brighter financial future tomorrow. If you think this blog was beneficial for you, consider it sharing with your friends and let them do the same.