As you enter college, especially away from home, you start experiencing the initial taste of financial independence. Most of us rely on our parents for pocket money; others often get a job or hustle for some extra cash. No matter how you get it, it’s important you understand how to grow and keep it. India has always been an economy, which has relied on savings as its financial strength. With the availability of easy money through EMIs, loans, debt etc, the Indian gen-y today is more consumption oriented and hence, it is imperative that you learn to be more financially prudent. Here are some easy tips to save you from perpetual zero balances.
Earn
Don’t just rely on your family, try and find other sources of income to pay your way through college. Whether it’s an odd job, freelancing or selling things you don’t need any more, an extra financial cash flow always comes in handy.
Save
I apply a 80/20 rule for whatever income I receive. Park away a flat 20% and make sure you do not spend it. It’s important to set aside this money for emergency. I used to receive roughly Rs 5,000 a week. At the end of the year, I saved about Rs 30,000 through this. Financial setbacks don’t arrive with an appointment, so you should always play it safe and be prepared. Developing a habit to save early in life will help you later as you rake in much larger income levels.
Invest
Smart people don’t just save, they invest. Start with basics and park your funds in fixed income deposit schemes, banks often give you a handsome 8-10% on the principal.
Investing in equity early will expose you to financial markets and you will be more comfortable later in life while betting bigger numbers. Stock markets are far from a gamble; you can achieve long term capital growth through research and well timed investments. The trick is to be patient and keep calm.
Invest in a business idea. Whether it’s your own or your friends, this helps you develop an appetite for risk. I invested into two start-ups while in college and both were sweet deals. Find your interests and hit the sweet spot.
Plan
In order to avoid frivolous spending, plan your expenses wisely. Create a weekly plan and stick to it. There are pretty cool mobile apps that also help you plan prudently. Some small tips to save money are:
1. Plan meals in advance to set aside appropriate cash. Avoid fast food; they usually burn a big hole in your pocket. Buy fresh food and learn to cook, you turn master chef in the process.
2. Travel smarter- use public transport and try and use sharing/pooling services as much as possible.
3. Enjoy student discounts that are available in abundance, always ask for a student discount, you are bound to get lucky.
4. Buy online to have the best deals and avoid the temptation of over spending in retail stores.