College teach us many things, but rarely do they teach us how to handle money. However, it is essential to have a good understanding of finance, as most of the students have debt or loans even before they start working. You need to understand some basic rules, so that you can take better judgement of your money.
1- Student Loans vs Expected Salary :- It is tough to graduate in any professional course without taking educational loans. However, you need to calculate how much of loan would be too much. Lets take a example, suppose you have loan of 7 Lakh at 12% interest and you have time period of 5 yrs to pay back. The EMI that you incur after 6 months from college would amount to Rs 15600/- approx. So, you need to get through a salary that would give you Rs 25,000/- at least to pay back this loan. Assuming you need only Rs 10,000/- to maintain your life style. So, this would mean you get into something that pays you more in just 2 yrs of your first job.
2- Books and Other fees :- Books taught in any professional course are quite costly. You also have other fees for hostel facility, computers etc. So, when you opt for books look for library options or lending options that could serve your need in cheaper cost. However, do your research before getting into such facilities as they sometimes might be more costlier.Most of the college's collect huge sum for hostel facility. Instead look for something cheaper, rent a flat with some friends. While renting check for additional bills.
3- Having proper Career Plan :- It is better to have a career plan in place , post your graduation. Students, mostly do not know what subjects they would like to pursue and that makes them take up courses that do not help them in future. So, while choosing a professional courses do some research and find out where you would like to plan your future. This could save a lot of your money by not taking up subjects that would be of little help later in your life.
4- Credit Card fees add up :- Do not be lured by the cheap offers. Many banks give credit cards with no processing fee and they lure you by saying it is for free. However, a credit card is like any other personal loan. You need to understand the terms and conditions on these cards before swiping it. It is advisable not to use a credit card when you are in college.
5- Credit vs Debit :- These are two terms that you should know, and understanding the difference is important. A debit card draws from money in your bank account and a credit card is that for which you pay at a later date. A debit card is a better option to keep a check on your spending habits. However, credit cards are beneficial to prove that you can borrow in responsibly that is you are responsible to pay back in correct time. This helps when you apply for any other loan.
6- Budgeting :- Start budgeting all by yourself. This is the time that you stay apart from your family and you do not have your parents to budget for you. Learn to budget well. Keep a check on all the bills that needs to be paid. Remember to pay before due date, and there by stop extra loss on late payment.
7- Nothing comes for free :- When you enter college, the loans may pay extra funds for your books and additional expenditure. But, remember this is loan and you need to pay back. So, use the fund wisely in the stuff that you need.
8- Understanding Bank fees :- In the world of ever-changing bank fees and new regulations, it’s hard to keep up with what banks are starting to charge us to use our own money. Check out what bank fees you will be subject to before opening a new account, and to closely monitor your statements.
Look closely at your statement and read the requirements for your type of account. Keep a check on the fees bank take on using other bank ATM's, on demand drafts, on over drafts etc to name a few.
9- Live Below your Means :-If you take up part time job, then remember just because you start making more money doesn't mean you should run out and buy that new couch you've been eyeing. Live frugally, pay yourself first.People in their 20s tend to think of retirement in abstract terms and as something to deal with far in the future, but although young people are getting better about it, their planning is not always done smartly. Start planning now and choose the right retirement plan for you.
10- Make a habit of saving :- Make a habit to save, be as little as is possible but this would help you in budgeting for your household, planning a emergency fund and investing later in your life.
1- Student Loans vs Expected Salary :- It is tough to graduate in any professional course without taking educational loans. However, you need to calculate how much of loan would be too much. Lets take a example, suppose you have loan of 7 Lakh at 12% interest and you have time period of 5 yrs to pay back. The EMI that you incur after 6 months from college would amount to Rs 15600/- approx. So, you need to get through a salary that would give you Rs 25,000/- at least to pay back this loan. Assuming you need only Rs 10,000/- to maintain your life style. So, this would mean you get into something that pays you more in just 2 yrs of your first job.
2- Books and Other fees :- Books taught in any professional course are quite costly. You also have other fees for hostel facility, computers etc. So, when you opt for books look for library options or lending options that could serve your need in cheaper cost. However, do your research before getting into such facilities as they sometimes might be more costlier.Most of the college's collect huge sum for hostel facility. Instead look for something cheaper, rent a flat with some friends. While renting check for additional bills.
3- Having proper Career Plan :- It is better to have a career plan in place , post your graduation. Students, mostly do not know what subjects they would like to pursue and that makes them take up courses that do not help them in future. So, while choosing a professional courses do some research and find out where you would like to plan your future. This could save a lot of your money by not taking up subjects that would be of little help later in your life.
4- Credit Card fees add up :- Do not be lured by the cheap offers. Many banks give credit cards with no processing fee and they lure you by saying it is for free. However, a credit card is like any other personal loan. You need to understand the terms and conditions on these cards before swiping it. It is advisable not to use a credit card when you are in college.
5- Credit vs Debit :- These are two terms that you should know, and understanding the difference is important. A debit card draws from money in your bank account and a credit card is that for which you pay at a later date. A debit card is a better option to keep a check on your spending habits. However, credit cards are beneficial to prove that you can borrow in responsibly that is you are responsible to pay back in correct time. This helps when you apply for any other loan.
6- Budgeting :- Start budgeting all by yourself. This is the time that you stay apart from your family and you do not have your parents to budget for you. Learn to budget well. Keep a check on all the bills that needs to be paid. Remember to pay before due date, and there by stop extra loss on late payment.
7- Nothing comes for free :- When you enter college, the loans may pay extra funds for your books and additional expenditure. But, remember this is loan and you need to pay back. So, use the fund wisely in the stuff that you need.
8- Understanding Bank fees :- In the world of ever-changing bank fees and new regulations, it’s hard to keep up with what banks are starting to charge us to use our own money. Check out what bank fees you will be subject to before opening a new account, and to closely monitor your statements.
Look closely at your statement and read the requirements for your type of account. Keep a check on the fees bank take on using other bank ATM's, on demand drafts, on over drafts etc to name a few.
9- Live Below your Means :-If you take up part time job, then remember just because you start making more money doesn't mean you should run out and buy that new couch you've been eyeing. Live frugally, pay yourself first.People in their 20s tend to think of retirement in abstract terms and as something to deal with far in the future, but although young people are getting better about it, their planning is not always done smartly. Start planning now and choose the right retirement plan for you.
10- Make a habit of saving :- Make a habit to save, be as little as is possible but this would help you in budgeting for your household, planning a emergency fund and investing later in your life.
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