Financial Mistakes Students Should Avoid: A Guide to Smart Budgeting

Don’t you wish you had all the money in the world to get whatever you want, whenever you want?

How cool would it be for you not to bother about your expenses as a student? Very cool, yeah?

Unfortunately, you are not that person... yet.

The fortunate thing however, is that you have us and we are more than pleased to help. 

Many Students struggle with managing their finances, but once the world of budgeting has been navigated it is a smooth ride from there.

Here, we would be sharing with you financial mistakes that you should avoid, avoid as in run away from as a student.

Not Creating a Budget

One of the greatest financial mistakes students make is not creating a budget. When you do not budget, you tend to overspend, forget upcoming bills and lose track of how much money you have left. A budget is a roadmap that helps you understand your income and expenses that is where you get your money from and where your money goes to.

• To create a budget, you can start by listing all your sources of income, tracking your monthly expenses and then setting spending limits for non-essentials. You can also make use of budgeting apps, as this will help you identify areas where you can cut back and ensure that you’re staying within your budget.

Overspending on Non-Essentials

“If I perish, I perish” –a student who is about to spend money on something that is non-essential and will eventually perish. 

The most horrible financial mistake students make is to overspend on things they do not really need. It is so easy to get carried away with eating and ordering out frequently, paying for one social outing or the other, or upgrading to the latest tech. However, while it is important to enjoy university/ college life, finding a balance that will prevent your bank account from draining is vital.

• Prioritize your needs over your wants by asking yourself whether an expense is necessary before making a purchase. Look for cheaper alternatives like cooking at home, create a discretionary spending allowance for fun activities and do not exceed it.

Not Saving/ Planning for Emergencies

Students most times fail to plan for emergencies, they just live life as it comes but, unexpected expenses can surface at any time and being unprepared can lead to financial strain. When you set aside a portion of your income for emergencies, you build a saving habit and you avoid going into debt when unexpected costs arise.

• Decide to save at least 5-10% of your income and create emergency fund for unexpected costs. Also budgeting apps have the option of automated savings which ensures that you consistently set money aside.

Neglecting to Plan for the Future

The future is now, they say, but for many students, the future seems far off and financial planning is pushed aside. However, when you establish good financial habits now, you set the tone for long term success.

Conclusively, student life is a time of growth, exploration and learning but making financial mistakes can leave long lasting consequences. By avoiding the mistakes above, you’ll be on a path to financial stability and success.

P.S: Smart budgeting is not about depravation, it is about making informed decisions that prioritize long term financial well-being over short term satisfaction