Student loan and credit card debt are at an all-time high. In fact, most students rely on loans to finance their education and cover various expenses. While grants and scholarships can help, they may not cover all expenses. However, regardless of their financial situation, learners should strive to avoid debt. That’s because debt-free students have the flexibility to pursue their passions and interests, be it starting a business or traveling the world without being constrained by financial obligations. So, use these tips to start your journey toward financial independence.
Borrow From Loved Ones
Money management for most students can be looked at as a clean slate. That’s because most students go to college without debt. Sadly, many leave college with a huge debt, mostly because of poor financial choices. So, the first step to evading debt is to avoid borrowing from organizations that are quick to lend yet charge exorbitant rates. If you manage your finances properly, chances are high that you won’t need to borrow. But if you must, then go to friends or family members because they won’t charge interest no matter how long you take to repay.
Say No to an Extravagant Lifestyle
Yes, it’s your birthday, and you want to take your friends out to an expensive restaurant and maybe order a bottle of champagne. But before you do that, ask yourself, “Is it better to save the money or use it to show off?” Often, money spent on luxurious items can be saved long term to generate more interest.
This is a safe way to ensure you have money set aside in case of an emergency or when you graduate and don’t get employed for several months. Some of the actions a student can take to avoid overspending include sticking to a budget that dictates money spent on tuition, online paper writing services, food, entertainment and more.
Have a Part-Time Job
With a busy schedule, it can be tricky to balance study and work, but many have done it thanks to good time management techniques. The trick to making this option work is to use half of the free time to work and the rest to study. That way, you don’t end up working and sacrificing the time needed to get a good grade. Use some of your free time to join a study group to gain deeper insights into course material.
Additionally, income from part-time work can offset the need for student loans or reduce the amount borrowed. By minimizing reliance on loans, students can graduate with less debt or avoid debt entirely, leading to a more financially secure future.
Plan Every Dollar
It’s easy to overspend if you make purchases with a credit card. However, when students plan for each dollar, they become more aware of their financial situation by tracking income and expenses. This awareness leads to better financial decision-making and reduces the likelihood of overspending or living beyond one’s means.
A fun way to budget is to allocate cash into different envelopes for different spending categories. Once the envelope is empty, you’re done spending in that category for the month. Students can also use online tools that offer rewards for sticking to their budgets or discounts for meeting savings goals.
Keep It Old-School
One motto the students at all academic levels can apply to their lives to avoid getting into debt is: If you’re unable to make a cash payment, it’s best to steer clear of the transaction. Using cash helps learners avoid accumulating debt, especially through credit cards or loans. For example, if a student wants to buy a new video game but doesn’t have enough cash, using a credit card might lead to accumulating debt and paying interest on the purchase.
Furthermore, cash transactions make it harder to make impulse purchases since learners have to physically hand over the money. For instance, if a student is tempted to buy snacks at the grocery store checkout, paying with cash may make them think twice before adding extra items to their basket, helping them stick to their budget. Carrying large amounts of cash can be risky. The remedy for this is to have cash for only what you need. This helps minimize the risk of loss or theft and encourages responsible spending.
Explore Unique Ways to Pocket Extra Cash
Students face various expenses during their academic journey, including tuition and daily living costs. The problem is that many of them rely on a limited income from parents or financial aid. While traditional sources of revenue may cover some of these expenses, they may not always be sufficient. By exploring alternative income opportunities, students can generate extra funds to cover these expenses without resorting to loans, credit cards, or other forms of debt.
So, look into opportunities to generate income outside of traditional employment. This could include freelancing, gig work, selling items online, or providing services in your community. Find ways to leverage your skills, hobbies, or interests to earn money on a flexible schedule. Even small streams of income can help cover basic expenses and, ultimately, help students avoid the burden of debt during their academic journey.
Look Forward to the Good Times Ahead
Students have long-term goals, be it buying a house, pursuing advanced degrees in their field of interest, or investing in assets. To achieve any of these goals, you must save for the future. To do that, set a specific amount to save each month, regardless of your income level. For instance, commit to depositing $100 per month.
Automate transfers from your checking account to your savings account to ensure this sum is saved regularly. Learners whose goal is to travel should calculate the total amount they require. Then, divide this total by the number of months they must save. For example, if you want to accumulate $2000 for a trip in one year, you would set aside $200 per month. The trick is to start small and gradually increase the amount over time as your financial situation improves. This approach allows a student to build the habit of having more deposits than withdrawals.