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Improve Your Budgeting Skills as a Student

With the new year right around the corner there are so many great things to look forward to! And, unfortunately, many unknown circumstances.

At time of writing this, there has been recent, popular talk of possible recessions, housing bubbles, job losses, and honestly, it can be a bit scary! With this in mind, you’ve come to the right place to get some solid advice for beginning your process to preparing your budgeting skills and learning to improve your finances for the future!

A new decade is weeks away. Are your finances prepared for what is to come? It is more important than ever to fine tune your budgeting skills!

In this article we will discuss the following 5 critical budgeting skills for students that are essential for a lifetime of financial success:

1. Track your spending
2. Learn about credit and how to effectively use it
3. Self discipline is key to long-term wealth
4. Realize that you should not rely on a job
5. Students should begin investing at a young age for max growth

#1. Track Your Spending

The very first step to building up your budgeting skills is to learn how to track your spending!

To begin, I suggest you download a budgeting and net worth tracker app. I use a free and beginner-friendly app called Personal Capital, where I have been able to track my budget, my student loans, and my new investments.

It is critical for students to build their budgeting skills of watching their spending because the amount of careless dollars spent in high school, college, and graduate school is a lot! 

By watching your money come in and out of your bank, you will begin to learn how to improve your finances and be more financially stable! 

#2. Learn About Credit

To ready your personal finance budget, this skill is essential!

Unless you already have a credit card, own a home, or are a young adult and took out a line of credit, you most likely don’t have a credit score yet.

However, as you begin to go through life, this is one aspect of budgeting that people forget about! 

I have a full article here about quickly improving your credit score, but if you do not have one yet check these 3 tips for students to have good credit!:

• Don’t pay for your credit score! Free platforms like Credit Karma offer what you need and have no effect on your score (or your bank account!). Other companies can actually cause drops in your credit score if you don’t do your research first!
• Check your score regularly! Whether you check every 3 months, or every year, shying away from the truth of your financial score isn’t smart. If you own a credit card and have debt, be honest with yourself and check your score often!
• Understand the WHY: College campuses are breeding grounds for credit cards. It is easy to sign up and easy to rack up debt. You do not want to ruin your chances of buying a home in a few years or decreasing your chances of getting a loan all because of a low credit score!

#3. Self Discipline is the Key to Long-Term Wealth

#4. Don’t Rely on Your Job

You’ve heard these words before, but their importance is more significant than ever.

The era of side hustles, entrepreneurship, and passive income is here and you’ll be lost in the trails if you don’t start learning about it now.

Thing is, younger adults are realizing that they shouldn’t rely completely on their single income – simply because life is starting to get a bit too expensive!

To earn extra cash, more people are turning to options like blogging, rental properties, and side hustles to be able to have a small cushion in case their job takes a turn. Here are few quick reads to learn more!:

• Blogging 101: The Beginner’s Guide to Retiring Early Online
• Real Estate Investing in Your 20’s: A Beginner’s Guide

Will you have enough monthly income to keep your house and car?

To begin the conversation, whether that is with a spouse or just yourself, consider these passive income ideas or start thinking of how you could make a difference in the world through some of these ways:

• Photography – Make extra cash on weekends or evenings! Pick a unique niche to stand out amongst the competition, like pets, births, events, or even iconic sites in your town!
• Blogging – It’s popular for a reason! When implemented right, blogging can earn you regular side income and be a great cushion for a job loss. Check out a blogging course or read through a step-by-step guide to learn more!
• Excel In a Hobby or Skill – If you’ve seen Etsy, you know that it is possible to make a great living from being crafty, a woodworker or having an eye for digital design. If you loose a job, do you have a skill that can earn you cash to pay your bills? Consider what you can teach or provide for others through doing a course on Udemy for example!

#4. Begin Investing Young

If you’re under the age of 40, you may not have much of a care for the word investing.

Understandably, investing can seem complicated, expensive, and was never taught in school!

So, why even bother with it?

No matter your age, every day that passes makes an incredible difference with your future’s finances. (Check out this simple investing calculator to get an idea!)

Therefore, I always love to help others learn how to dip their toe into investing – without spending any money!

Plus, imagine how much simpler your personal finance budget would be if you had extra cash flow each month!

Start Now – Before it is Too Late

The question I always get is, “But, HOW?”.

There are two free options that I used a while back that I recommend throughout this blog:

• Robinhood

  Robinhood is my favorite because you can truly learn about stock investing on a trusted and beginner-friendly platform without spending a dime! Click here to get a FREE stock to start learning, practicing, and investing!
  (To provide you with a free stock, this referral link is associated with a family member of ThirtyEight Investing!)

• Acorns

  Acorns is a popular way for new investors to start without needing any prior investing knowledge! You can get your first $5 for free by starting here!
  Be sure to check out this article for in-depth explanations for how to invest without spending any money!

Some Tidbits of Advice for 2020:

• Diversify!

All of the books and trusted authors remind you of this pivotal investing strategy. It is never smart to put all your eggs in one basket! Start learning about types of investing here!

Budget to Invest

Setting aside a regular amount is critical to start saving for a rainy day! Especially if you already have a family If you don’t already know your net worth or have a budget, be sure to learn about one of the most popular platforms here, to get started on your path to budgeting!

Start Learning – And Don’t Stop!

With blogging, free ebooks, and podcasts, there is endless information to help you. You just need to look! Start learning about real estate investing, pick up a book on mutual funds, and start practicing with your new apps!

I’m so glad you chose to spend a few minutes of your day with me! Be sure to download your free budgeting workbook guide here before it’s too late!

Have a minute? Learn one more thing!

• The Simple Trick to Save Thousands Each Year
• How To Make Hundreds Quickly With Passive Income 
• The Only Books You Need To Retire Early

References:

• https://www.daveramsey.com/smartvestor/investment-calculator
• https://news.gallup.com/poll/266960/economic-confidence-drops-lowest-level-shutdown.aspx