This post has been written by Nelly.
Financial Literacy Is The Key To Your Financial Security
As a freshman in college, it’s very likely that you have become the boss of your own now. But you should be wise enough while enjoying this freedom.
You might be getting a vibe that we are going to discuss financial literacy. If you are, then you are absolutely correct!
A data by the Financial Industry Regulatory Authority (FIRA) shows that 63% folks of our country are financially ignorant. They don’t pay off their debts on time and can’t even manage their bank accounts. To be precise, proper planning of future is not done.
A survey of consumer finances shows:
Financial literacy is the only way to solve these problems. We believe that a bright future is awaiting you. Acquiring knowledge about financial literacy will help you in the long run.
It reveals how you manage your financial decisions. As a result of which, you gradually become self-sufficient.
But, how will you create an awareness regarding financial literacy among people? To achieve that, we have listed up some financial tips for you.
Here you go!
Be budget savvy
Budget is the key to your financial management. You should list all your necessary expenses along with your all possible income sources like allowances from parents, scholarships, other financial aid, etc.
If you think that creating a budget in pen and paper mode is too old school, then don’t worry! Technology is there to help you with that. You might use spreadsheets and other apps, which help you to maintain a proper budget.
Keep this in mind that only chalking out a budget won’t work. You should strictly adhere to it so that you can come up with a habit of saving. Also, you need to make modifications to it from time to time.
Sharing is caring!
Staying off the campus in the universities, which are located in the expensive cities of our country, can burn a hole in your pocket. Always try to stay on your campus and share your accommodation with other fellows. This can minimize your accommodation cost to a great extent.
Hence, it can take care of the health of your wallet.
Opt for the meal plan provided by your university which will cost you less.
Also, if you know how to cook, then you might save a bit more and enjoy food of your choice.
Engage yourself in some part-time jobs
You can look for some on campus or off campus jobs which offer you to work in the part-time hours.
If you opt for these part-time jobs, you can pay your basic expenses with the salary you will get. Instead of depending fully on the financial aid from your parents, scholarships(if any), you can feel the first taste of financial freedom.
As a result, you can start saving, even if the amount is very nominal.
Manage student loans wisely
In 2019, student loans have been the highest ever. A recent report reveals that the total student debt in our country amounts to $1.56 trillion, which is more than the combination of auto-loan and credit cards. It takes a long time for the repayment of these loans.
As you can see, you need to avoid student loans as much as possible to get rid of the debt trap.
However, if you have opted for loans, then you have to keep the following things in mind:
- Track each and every detail of your loan so that you can understand whether or not your payments are on track.
- Go for repayment plans, which are based on your income. By opting this, you can even pay $0 for some time, if your income is below the state’s poverty limit.
Always have a look for discounts
Whenever you are going for any movie, going for eating out, always check whether or not there is any student discount.
You can go through websites like giftcardgranny.com, which provides a list of retailers, who offer student discounts.
Technology at your doorstep!
Instead of buying textbooks, you can look for other alternate options. There are several websites which will allow you to read e-books and download them at free of cost. However, if you don’t have any other option except textbooks, you can buy the second-hand versions from your seniors.
There are several websites like scholarships.com, cappex.com, etc. which help students to find thousands of scholarship opportunities.
Install the apps like SavingsSpree, Learnvest, etc. which help you to maintain a proper budget and enrich your finance knowledge.
Partner with a friendly bank
Usually, services provided by the banks come with a charge. However, there are few banks, which don’t charge students for the basic services.
Opting for these banks will help you to save the charges which could have been levied on you, had you been a normal customer.
Avoid using credit cards
You might get tempted to the lucrative credit card offers by the banks. But, we would like to suggest you from staying away from these offers.
Still, if you have opted for a credit card, use it wisely else you will end up being debt trapped. Now, you might ask about the worst case scenario, i.e, what if you become debt trapped.
So, if you become debt trapped, you can approach a debt consolidation company.
A debt consolidation company merges your multiple unsecured debts to affordable single monthly payments. Also, this comes with a lower interest rate than the individual ones.
Thus, it will help you to pay off your consolidated debt with ease.
However, it’s always better to make timely payments for your credit card bills.
Create an emergency fund
Creating an emergency fund is one of the important pillars of financial literacy. Though technology has made excellent advancement, yet you can’t predict your future, still now.
So, what will you do if an emergency situation arises?
This is the time when people become vulnerable to loans and creditors. To get rid of this, you should create an emergency fund from the early stage of your life.
Allocate separate funds from your income as your emergency fund.
Make sure you don’t fall into a debt trap if an emergency situation arises in your life.
Be protective about your personal information
Don’t share your bank account details or credit card information with anyone. Whenever you are doing any online transaction, make sure that the web address starts with “HTTPS’ instead of “HTTP”.
If anyone asks you to share any OTP(One time password) sent by the bank, never ever do it! The fraudulent people might call you posing as bank officials but you should be aware, to avoid such discrepancies.
So, don’t fall prey to the unscrupulous people while transacting online.
Are you following the above mentioned advices?
If you are not, then don’t be late! Being adept in the concept of financial literacy can add one more feather to the cap of your education.