Your college days are the best time to build good money habits. These guys learned it the hard way. Here’s their story.
The transition from high school to college isn’t going to be an easy one. You’re going to have to make a lot of changes to your life, especially if you’ve been living under the shadow of your parents until now. There have been many instances where freshmen have dropped out because they couldn’t adjust to college life.
Till yesterday, freshmen were the ones who had to ask permission to go to the restroom during classes; today, they have to wake up on their own and make it to their 9 AM class without the support of mom or dad. Well, ‘adulting’ ain’t easy!
Although we can’t really help you get a grip on most of your new responsibilities as a college-going kid, we can surely save you from being a financial mess. So, we asked people across the country to tell us what they wish they had known about money management before they headed to college. Here are their little nuggets of wisdom, just for you:
Sravani Das, 31, Kolkata
“I’ve been in a cash crunch situation all through my college life and post that also. Sigh! Wish someone had told me that money really doesn’t grow on trees. I totally regret having spent all those cash gifts I received on stupid clothes, accessories and dates. I should have just put it in a Fixed Deposit or maybe even invested it.”
Sravani’s advice: Don’t aimlessly spend money that you get from your parents, relatives, grandparents. Put it in a Fixed Deposit or invest in Mutual Funds and let it multiply. Time is your best friend when you are young.
Suman Dhama, 25, Delhi
“Hostel life is, like, a nightmare, especially when you are used to being treated like royalty at home. Food is usually horrible. You have to do your own laundry. And what-not! Plus, since your parents already pay your hostel and food bills for months, you have to dig into your meagre pocket money if you want to eat outside or get your laundry done. My pocket money used to be over in like 10 days and I had to keep asking my parents to wire me money, like almost every two weeks.”
Suman’s advice: It’s like an emergency situation. You just got to be prepared well ahead. I’d suggest that you start saving up at least a year before your college starts. A good budget will help you save more than enough extra cash to get you through your college years. Also, don’t stop budgeting and saving when you’re in college. It’s always good to have emergency cash.
Additional Reading: The Dos And Don’ts Of Budgeting
Veer Arjun, 27, Bengaluru
“I always dreamed of going abroad to do my higher studies; even had made big travel plans. Unfortunately though, I never really thought about how I am gonna finance my studies and travel plans. Of course, I could rely on my parents for financial assistance but that’s not how I wanted to do stuff. And sadly, I dropped my plan to study abroad, haven’t really travelled anywhere much; basically, I’m just stuck in a 9 to 5 regular job here.”
Veer’s advice: If you have plans to study abroad (I’d suggest that you do plan), then start saving for it as soon as possible. You can park a small amount of your pocket money or salary (if you are freelancing) in, say, a liquid fund or a Mutual Fund.
Additional Reading: Travel Budgeting 101
Balaji Srinivasa, 34, Chennai
“Credit Cards are a boon and a bane. Getting a Credit Card during your college years is a good idea to take care of your extra expenses. But, if used irresponsibly, you can destroy your financial future. I used my Credit Card for everything; often exhausting it. Plus, I never used to pay my bills regularly. And this really affected my Credit Score. I realised it only when I wanted to take an education loan for my higher studies. Almost all banks rejected me.”
Balaji’s advice: Use your Credit Card responsibly. Pay your dues in full and always within the due date. Too much debt and reckless usage can damage your future borrowing chances.
Additional Reading: Credit Card And Your College-Going Kid: Is It A Good Combination?
Sharon Jacob, 29, Kochi
“Trust me, finances are a pain! I did try my hand at working for a while before college, in the hopes of gaining experience in a relatively new field (animation) and getting some extra bucks. But when you’re fresh out of school, most employers take advantage of the fact that you have zero work/life experience and quote an abysmally low salary. Anyway, I quit the job in no time and signed up to study. From then on, I was careful of my finances, even going as far as to freelance from my second year in college in order to make some money for the occasional coffee shop/pizzeria binge fest.”
Sharon’s advice: Freelancing/part-time work is a great way to make some extra money. This will help you sail through your college years without having to face any financial hiccups and you needn’t wholly depend on your parents.
Ashwin Paul, 26, Mumbai
“Although staying away from family played a large role in my personal development, it wasn’t really an easy task. It did teach me to be self-sufficient and independent, but it took a while. Being the only kid, I was quite pampered. For me, life was all about getting the best and latest stuff, looking good, hanging out with friends, night-outs, dates, etc. I literally had no clue about money management. Or rather, I should say that I never bothered about managing money. No savings, no investments, no emergency stash… just overindulgence! I learned my lesson when there was a family emergency.”
Ashwin’s advice: Start saving during your college days. Even a Savings Account is a great start. This must be your top priority, no matter how rich you are.
When you’re in college, your financial picture is completely different from someone who is in a full-time job. It is true that you haven’t really started making real money. But it is the right time to get serious, to start ‘adulting’. The mistakes you make during your college days have nearly 90% chances of following you through the rest of your life. So, take action now and secure your future.
Additional Reading: What Your College-Going Kid Should Know About Personal Finance
Wondering how or where to start? How about a Fixed Deposit?