6 Basic Personal Financial Management Tips

• November 23, 2011
• General

Whether you are just starting your adult life after high school or are returning to school after starting a career and a family, personal financial management is important in ensuring you complete your degree.

Maybe you are receiving financial aid, or you’ve decided to work your way through school, paying as you go. Either way, this advice can help reduce stress so you can concentrate on the task at hand, which is completing your education. These tips will also allow you to maximize your resources while you’re in school and beyond.

1. Use your financial aid wisely. Remember, any loans you have racked up by the time you graduate will have to be repaid, so do you really want to be paying for that spring break trip to Florida in 10 years — with interest?
2. Track your spending. Spend a month or two noting each purchase you make. You may be surprised how much you’re spending on coffee. Understanding how much you spend and the things that are truly a priority will help you stay within your limits.
3. Establish a monthly budget. Sure, you’ve heard this before, but have you actually done it? No one says you can’t have your latte. But maybe it makes more sense to buy a $5 pound bag of coffee at the store and make 20 cups than to pay $100 for 20 cups from your favorite coffee shop. That’s not to say you can’t buy a cup of coffee when you hang out with your study group. You just need to budget in the likelihood that you’ll do that.
4. Think immediate needs, short-term and long-term. Your immediate needs will include expenses like tuition and book and lab fees. Some of your short-term needs or desires may be purchasing clothing items for a job interview or school supplies for your children after summer vacation. And your long-term needs may be to be saving to buy a house in the future or setting yourself up for retirement. Set up strategies for each level of need and save accordingly.
5. Manage your risks. No matter your age or health condition, it’s important to have health insurance. No one can predict an illness or a broken arm, so ensuring you are well covered is essential. If you are 24 or younger, make sure you are covered by your parents’ insurance. If your parents don’t have insurance, find a program geared for students. If you are 25 or older and are not covered by workplace insurance, the internet is a good source for insurance quotes.
6. Don’t spend what you can’t afford. Living within your means is very important to good financial management. Try to avoid using your credit cards except for serious emergencies. And enjoy socializing with family and friends doing activities that don’t require big spending. Playing kickball or going fishing are great past times that won’t hurt your wallet.