
Building Healthy Financial Habits As A Student

Managing your financial assets well as a student is a good habit to begin with as you ease into the adult life. Without proper management, having a high income does not necessarily mean that you will always be financially healthy. Although managing personal finances may sound complicated and daunting, it will not be if we start building healthy financial habits early.
1) You need to understand your cash flow
It is important to understand your current spending patterns to plan for a proper budget. Spend some time to pen down both your cash inflow and outflow, allowing you to better allocate your finances. To ease the process, there are many expense-tracking mobile apps available to track your spending. Make it a habit to record down your expenses after every transaction. (Examples of recommended apps: Monny, Seedly, Spendee)
Examples of cash inflow and outflow:
After understanding your cash flow, set a self-enforced budget plan to stick to. However, a few questions to ask yourself include: “Is my outflow more than my inflow?” “What are some areas that I can improve on?” Always ensure that your cash inflow exceeds your outflow in order to set aside savings.
Also, areas to improve on can include things such as further reducing phone bills by searching for alternatives that may be more cost-effective or choosing to share subscriptions with friends. With your budgeting plan in place, you will then be able to think about your medium to long-term financial goals, which are plans for yourself in the next 2-3 years.
2) Separate your wants and your needs
“Don’t miss the annual 12-12 sale, add to cart now! *cue Lazada and Shopee advertisement*
Sales used to happen once in a long while, such as the Great Singapore Sales, but now it happens almost every month and during any festive occasions. With the multiple promotions and the convenience of shopping on the go, it can be very tempting to spend our money on things that we want, but do not need.
Therefore, it is important to adhere to your budget plan strictly. Write down a list of things that you need to make good use of the sales without buying unnecessary items.
3) Save up!
Lastly, what should you do with the extra cash after setting aside your budget? Having an emergency fund is of utmost importance and this acts as a buffer to keep you out of debt, whilst protecting your everyday lifestyle. It is recommended to have at least 3 to 6 months of expenses set aside as your emergency fund.
It will definitely take time and a lot of self-discipline to develop all of these financial habits, but it will pay off in the long run. By starting early as a student, it serves as a good foundation for yourself before you start working. As your priority changes along with having new goals and commitments, always remember to review your financial situation periodically. Set new budgeting rules for yourself or adjust the amount of emergency fund required!
– Zhang Ruo Lin (@ruolinzz), Financial Services Consultant