Many freshmen- managing their lives on their own for the first time — make even bigger mistakes than high schoolers. Some guys concentrate on pampering members of the opposite sex, trying to please them, some concentrate on looking cool. All these ventures leave first year students with huge bills and expenses. Some students take unnecessary loans oblivious of the many years of repayment while blowing the loan before mid-semester.
“They just don’t have a clue.” This is a sentiment echoed by many finance lecturers at Kenyatta University. “They are taking out student loans that they don’t fathom they are going to have to pay back later. They think they deserve everything right now. They don’t understand these are college days, and you’re supposed to be broke and not have everything you want.”
Here are a few ways freshmen can avoid flunking their Personal Finance.
Start with a budget. That means writing down what you think you’ll spend in a month and then checking to see how close your estimate was. Many young people ignore this but budgets are very useful. Don’t forget to budget for fun, such as concerts, drinking and eating out with friends. Budget enough money for necessities such as toiletries and food not covered by the meal plan. Buy things in bulk if possible, it has been proven that necessities in bulk actually last for longer.
Some parents give their first year kids a lot of living expense money for the semester all at once, and they blow it all in a month. The parents then have to reopen the wallet after their kids come back with lies and lots of problems.
Parents, who give their children just a month’s expenses at once, motivate them to learn financial lessons without the magnitude of the whole semester. In your first year, it’s better to agree with your parents when and how much you should get pocket money. This will help you be a better money manager. If you finish your money before the giveaway date, you will find yourself looking for other smart ways to make money.
Don’t take out any more in loans than you need. If a loan provides more than is truly needed, the freshman should be wise to take up a loan that only covers part of their tuition fees and expense, not all of it. Payment of loans will make you take longer to settle once you get a job. You will always feel cheated by not being able to enjoy your full salary yet in truth, you cheated yourself.
Manage your meals. Meal plans vary, but for some programs, it’s possible to spend it all before the semester ends. Haul yourself across campus to the cheaper cafeterias and stock basic non-perishable meals to save money.
Shop around for books and appropriate learning material. Financial planners say buying new texts at campus bookstores may be a lot more expensive than other options. Learn about the necessary books and material from senior campus students who are in your program. This helps you prevent consistent borrowing and desperation.
Think about a part-time job for income. Many freshmen brush aside the idea of a job in first year. Jobs are necessary at any point in life. They make you responsible and improve your liquidity. Consider something that you are passionate about and look for a small job. If you have connections, start using them early. Never store your bullets because you just might not have the chance to fire them later
Watch for hidden costs. These include fare and high accommodation expenses. If you weren’t lucky enough to get hostel space, reside near school. Fares are very costly, working class people can testify to this. For the later college years, alcohol is another expense that can really add up without students realizing it. Don’t start a heavy drinking habit in your first year. The misdemeanor may just refuse to go away and you’ll spend much money and time on alcohol rather than on progressive areas.
Begin a savings account. It doesn’t have to be a lot. But saving begins a precedent that serves students later in life. The sooner you can get in the habit of spending less than you make, the better. That sets up everything for you to have good finances later on.
The difference between the successful people and the not so successful people isn’t so hard to figure out. Successful people are keen on the simple rules of life. These rules always seem boring but once embraced, they mold one into a better person. When we are young, each one of us has an equal chance of making it in life. When we get older, the chance become more unequal and gaps are created. It’s a choice you have to make.