How to Manage Your Finances as a Student
Posted on Thursday, September 21st, 2017
One of the most obvious stereotypes of students is the financial struggle: surviving on ramen, counting out pennies (or, nowadays, nickels) for laundry, picking up whatever extra shifts come along. And it is true that your time spent in school can be among the most frugal times of your life.
But there are ways to mitigate the struggle. Bursaries, scholarships, and government programs like OSAP are designed to help you get through the lean years of school. And there are steps that you can take, as well.
Below, we look at three ways to start managing your finances as a student.
1. Make a Budget
This is always the first step to successfully managing your finances, and there’s very good reason for that.
When you have an understanding of how much money you have coming in and going out, it becomes much easier to make decisions between things like eating out and cooking at home. It becomes a lot less scary to open your bank account, because you know where you stand at any point through the month.
Making a budget doesn’t need to be intimidating or difficult, either. There are hundreds of templates online to help you sketch out where you stand.
If you’re unsure how much money you should allocate to each area, there are a few tricks to help. First, track your spending for a few weeks to see where your money is going. You may notice that you spend too much on non-necessities—that’s okay! Think creatively about how you can start cutting back: making coffee at home instead of buying out; getting books at the library instead of buying them; thrifting instead of shopping new.
Secondly, think of your priorities. Tuition, textbooks, rent, food, and internet will all be up there. Travel, hobbies, shopping, and other components may be more negotiable. Your financial priorities will differ from other people’s, and that’s okay. As long as you plan it into your budget and stick to it, you will be fine.
2. Pay Yourself First
‘Pay yourself first’ is a pretty common mantra in personal finance spheres, and that’s for good reason. It doesn’t mean spending money on indulgences—instead, it means putting aside money into savings as soon as you get paid.
It can be daunting to factor savings into your budget as a student, but it is a key part of building a safety net for yourself—for when school gets extra busy and you need to miss work, or unexpected expenses push your budget over the edge. Having even a modest bit of money tucked away in those situations is important.
You don’t need to do anything drastic—small amounts of money add up over time. You can set up automatic withdrawals so that as soon as that money goes into your account, a portion is transferred to your savings account. That way, your savings are taken care of first, and you won’t accidentally spend them throughout the month.
3. Think of the Future
It’s really hard to get out of the student mentality when you’re still enmeshed in the school lifestyle, but thinking of the future you will make it a lot easier to stick to your budget.
Try to remember that you’re not saving for some stranger in the distant, unimaginable future; instead, you are saving for you, in a not-so-distant future. When you graduate, you’ll be ahead of the curve if you can keep your finances under control while in school. You’ll be even more ahead of the curve if you start saving for retirement now (yes, already) and keeping your credit score healthy.
The future you—whether next year, three years, or forty years away—is worth working for now. You’ll thank yourself.
If you’re struggling financially, looking for guidance, or want to apply for bursaries, the Algonquin College Financial Aid and Student Awards office is here to help you.
If you would like to learn more about the Algonquin College co-op program, please visit our website at https://www.algonquincollege.com/coop/, connect with us at coop@algonquincollege.com or call us at 613-727-4723 Ext.7623. You can also follow us on Twitter @AlgonquinCoop.