I am currently stuck at home studying remotely, but I recently got to thinking about the changes that will accompany me once I am on campus. One of the most important changes being financial independence (to a certain extent) and managing my own money. So I spent this past weekend watching a bunch of YouTube videos, listening to money management podcasts and more to help guide me. Here are some tips I picked up from my limited (yet enlightening) experience talking to adults around me and from the internet to help guide you to manage your money better.
- Open a bank account
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Opening a bank account is the first step to becoming financially independent. It’s only the first step but it is a very important one. This bank account can also be a joint account with a parent or guardian. Keep in mind that there are different kinds of bank accounts out there. Choose the one that seems best to you and your personal situation. A checking account enables you to be able to earn interest on money you make. A savings account may also be a good idea if you want to save up a part of the money from your checking account.
- Read all the fine print
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I cannot stress this enough, but please read ALL the fine print. It may save you from being charged backend fees or any penalties for using an out of network ATM without being unaware. Each bank has their own rules and each type of account also may have different rules. So read all the fine print like your life depends on it.
- Automated savings
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Creating an automated savings plan which moves a certain fixed amount (set by you) from your regular checking account into your savings account can help you save money long term. Moving 10% of your monthly income from your checking account into your savings account is a good start and this can be changed by you at any time.
- Budgeting
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Budgeting is where it’s at. Listing your monthly income and the things you need to spend it on can be very helpful in determining how much to spend and on what. Try using the 50/30/20 rule. This rule states that 50% of your total income for that month should go towards necessities, 30% towards wants, and 20% towards your savings. The rule can be modified to 30/30/40 or 60/20/20 according to your situation.
- Get a credit card
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A credit card can be a very useful tool but only if used properly. Look for credit cards with little to no annual fees and cashback and rewards programs. Enrolling in a rewards program is a great way to earn credit. Make sure to not only to set reminders for your payment deadlines but also to pay them in full when you can to avoid being charged interest on the extensions. Also, please only use your credit card to pay for stuff you can afford. Using a credit card responsibly can make it a great asset and can also help you in the future when applying for loans if your credit score is high.
- Invest in things
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Taking help from a guardian, mentor or someone who has invested before is a great way to start investing. I am not the correct person to get advice from about this but there are loads of online resources available if you’re interested. My only tip is to start small.
- Buy second-hand instead of new
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Buying second-hand and thrifted items can be a great way to not only save your money but also the planet. Invest in basic clothing items which can be mixed and matched to create new looks. Depop, Poshmark and Ebay are great places to buy second-hand items. And for those expensive tastes, buying consigned designer clothes and accessories from the Real Real may be a more budget-friendly option.
- Watch videos, listen to podcasts or read a blog
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Watching a video or listening to a podcast can help you develop these skills further. Camille Collazo on Youtube is a great channel to help you live your best life by managing your finances well. The Mo’ Money Podcast by Jessica Moorhouse is another great resource. If you like blogs, the Money We Have Blog is worth a read.
These are only guidelines and suggestions and please make sure to do your own research beforehand. I hope that at least some of this information is useful to you.
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