Let’s start off by understanding what the term ‘Financial Independence’ means in the first place. Financial independence is a status when a person is self-sufficient in terms of finances (primarily due to employment) and doesn’t have to depend on a guardian or a partner for money. Most people assume that it’s close to impossible to gain financial independence while still studying in college. It is true that it can be hard to gain complete control of your finances when you are hardly 20, but it’s not entirely impossible. The first thing that a student is supposed to do before planning out for gaining financial independence is to inculcate the habit of having financial responsibility. Before getting to know how to achieve financial independence, it is crucial to understand why financial responsibility is important:
Why should college students be Financially Responsible?
Many college students might find it completely unnecessary to start saving money or taking measures to become financially independent when their parents are already sponsoring them. Isn’t this the time to enjoy youth and college life? However, in reality, a college education requires so much money to be invested. Hence, this itself acts as an indicator as to why the sense of financial responsibility is important for students. The period when one attends college happens to be the best testing ground for figuring out how to manage finances and learn how to budget. Here are some of the reasons why one should consider becoming financially responsible while at college:
- Learn more about your spending style and pattern
- It will act as an excellent period to practice budgeting
- Inculcating self-financial responsibility will automatically make the student an intelligent spender in the future
How should students start the process of becoming financially independent right from college?
There are three different aspects when we talk about financial responsibility, especially from the perspective of a student:
- Earnings
- Smart spending habits
- Savings
Out of the three things stated above, the most important ones are earnings and intelligent spending habits because savings is largely the by-product of the first two aspects.
Earnings: As a student, one could take up part-time jobs or start small profitable side hustles. The part-time jobs you take could be based on anything that you like and are interested in doing. Let’s say you like animals, then try animal babysitting during the mornings in your neighborhood when you don’t have morning classes or else. Let’s say you love makeup; take up a part-time makeup esthetician job in a neighborhood makeup store where you could help out customers figure out suitable products and looks. If you don’t like to work under anybody at all but wish to do something on your own, go ahead and start a side hustle. There are so many resources for students to create that partial income for themselves. Here are some of the other fields in which students can easily apply for part times or make an extra earning:
- A Barista at a local coffee shop or a Bartender at a pub
- Social media marketer for a neighborhood business
- A paid brand ambassador for a small startup
- A fitness trainer
- Scribes
- IT support specialist or a receptionist
- Peer tutor
- Restaurant server
- Working on stocks
- Copywriter and so on
There are so many resources available for students to make some pocket money for themselves, and one could find some of these part times within their respective college campus in a much easier way than searching them elsewhere (also, it is easier to get recruited within your respective college campus). The small earnings that you make out of these jobs could be used to pay off mobile, internet, or small car maintenance bills, covering daily utilities, self-care services (going to a nail parlor or salon), or putting them into a savings account for future use.
Smart Spending Habits: Often, people confuse smart spending with being stingy. They both are completely different and contradictory concepts from each other. Smart spending is when a person makes good, informed, and conscious decisions while purchasing something, not obstructing purchasing at all. Smart spending is a skill that gets better with experience and observation. Let’s say you want to go grocery shopping, and you have two options of either going to shop A that’s a little far away from where you live, or shop B, which is very close by right in your own alley – if you make an informed decision to buy at shop A instead of B because it offers better products at a cheaper rate, then it’s a smart spending choice that you have made. Here are some tips for becoming a better and wiser spender:
- Think multiple times whether a purchase is necessary or not at that given point in time. For instance, eating out might be way costlier than cooking healthy meals for yourself at home and hence, limit eating out as much as you can. But also do note that you shouldn’t deprive yourself completely of something that you believe will make you happy nothing is more important than you have better wellbeing. But still make conscious decisions while purchasing.
- Ask for discounts and use the advantage of the fact that you are a student (One of the most significant advantages of being a student is that there are many places that give you discounts. For instance, you can get up to 6 months of free subscription at Amazon Prime).
- Make it a practice to budget and keep a record of your finances. This can’t be emphasized enough as it is a very healthy habit to inculcate. One does not have to start budgeting in a complicated manner using Excel but start with nothing down all the simple expenses made every week onto a diary and gradually analyze your spending habits and create spending plans. It looks tiring, but in reality, it hardly takes five minutes to keep a record of the expenses and budget them. This not only makes you smarter financially but also teaches you how to appreciate the value of money.
- Though this isn’t a smart spending habit, it is essential to constantly understand the importance of applying for financial aid and scholarships. They always come in handy as they reduce your college expense by a huge scale. Therefore, even if it seems tiring to write multiple essays for scholarships, never underestimate its value and importance.