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Financial Management (For Students)


A guide on how to manage your finances as a student

Build the habit of saving

  • As students, some of you might have the luxury of having your parents providing your daily needs.

  • Its important to cultivate the habit of saving from an young age

  • Start by saving a small portion of your allowance (10 to 20%).

  • The focus is not on the amount you are saving, but the habit of saving that you are trying to build.

  • Make it a part of your lifestyle


Setting a budget

  • Create a spending plan on how you intend to spend your money

  • Having such plan allow you to assess whether you will have enough money to do or buy the things you need or like to have

  • The goal of a budget is to make sure that you are spending less than what you are earning or being given

  • Following a budget will reduce the possibility that you incur unnecessary debts

  • Choose a budget that fits your lifestyle and adhere to it


Needs vs Wants

  • A "Want" is something you wish to have in your life (Eg. Luxury goods, staycations, etc.).

  • A "Need" is essential or important for you to have in this life (Eg. Basic meals, daily necessities, etc).

  • Differentiate between your needs and wants

  • Prioritise your needs before fulfilling your wants

  • It is okay to spend more than usual occasionally but make sure that you are spending within your larger budget


Apply for a credit card only when you are ready

  • There are credit cards marketed specifically for students, however apply for one once you are confident that you are able to manage your finances

  • Credit card may encourage you to spend more as you are now able to spend the money in advance

  • If you have decided to apply for one, remember to pay your credit and bills on time as penalties charged on late payment are extremely high and can accumulate quickly.


Invest

  • Learn to invest and start young

  • Young investors have a tremendous advantage (eg. Having a longer time horizon for investments to grow).

  • Start by investing a small amount of money regularly

  • Compounded returns are extremely lucrative over the long run

  • An investment of $1,000 at an interest rate of 3% p.a. would have grown to $2,000 in 24 years

  • There are many investments products available in the market depending on your risk appetite, capital, and the times you are willing to stay invested.

  • No-one-size-fits-all investment plan, so reach out to trustworthy friends or professionals to get advice

  • The golden rule in investment is to only invest what you can afford to lose.



Written by: Chia Miao Ting | Designed by: Chia Miao Ting | Edited by: Jonathan Kuek

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