Knowledge and Insights

Back to School Rules: School Year Resolutions

Financial Literacy

As the new school year begins, many students are looking hard for a part-time job to help defray school and personal expenses. With a primary focus on studies, they also need to invest some time planning their finances for the year, which, in turn, will help alleviate some stress. Whether you are in high school or college, you need to think about money, set goals and make a plan for the year. With that planning, you should compose some of your own School Year Financial Resolutions, to guide you with your money matters. You might consider:

  • Buy needs, not wants — Although these decisions sound simple, they are sometimes very difficult to make. A simple question to help sort out needs versus wants is, “Would I be better off 10 minutes, 10 days or 10 months from now, if I bought this (i.e., a calculator, piece of clothing or new video game)?” Take a look around you and see all the stuff you have bought that you do not use; were they really needs? And yes, once in a while after you have saved up enough money, treat yourself to buying a want. Finally, never buy something you might need because it is on sale.
  • Make a budget and stick with it —Though most agree that plans for earning and spending money are necessary, fewer than 50% of adults have them. Every student should have one, follow it throughout the year, and change it, if necessary. The best ways for students to budget are fairly simple. Many students put a fixed monthly allowance electronically into their debit card account or in cash into their cash envelope. When the money is gone, they stop spending for the month. This resolution goes closely with another, “Don’t spend it if you will not have the money in the next 30 days.” And, you cannot forget to keep track (in a journal, on your phone or by collecting receipts) of where and on what you spend your money each month. You would be surprised where some of your money goes.
  • Keep credit cards at home or in the back of your wallet —Credit cards have useful purposes, such as paying for items in an emergency or helping you buy groceries if you are short on actual cash. However, you must remember that each time you are using a credit card, you are borrowing money and need to pay it back within 30 days. Credit cards are often very risky for students, as the cards make it so easy to buy wants or overspend your budget. Many students have smartly shifted to using debit cards, which can stop you from spending money that you don’t have in your bank account. Keep your credit cards at home or in the back of your wallet. They are there when you absolutely need them.
  • Find ways to have inexpensive fun — Students are great at asking for the student discount and taking advantage of student days at various entertainment venues. You need to remember that you have the most fun with your friends doing things that you all enjoy. That could be participating as a group in student clubs, intramural sports and community service activities, or simply enjoying many of the free or discounted cultural and entertainment activities in the area. Take advantage of these and find new ways to enjoy your time with your friends during the school year. Become a master in the art of inexpensive fun!

Jot down your money rules for the school year. Put them on your phone in the notes section. Look at them time and again; revise them. Just remember two things: it is your money and once it is spent, it is gone.
Have a great school year!