It’s hard not to be surprised at how important money and finances are to the life of every individual on Earth and yet it’s not being taught in schools. You can’t help but wonder, what is the sole purpose of school? Is it not to prepare young ones for the real world, then why is a major factor for survival in the real world not being taught in schools.
Right from the time when a person is born, they are always guided by their parents and teachers about how to live right, how to be relevant in the society but they are never thought about finances and how to be financially literate. Little wonder so many graduates today struggle to survive due to the fact that they never learn to manage their finances.
WHAT IS FINANCIAL LITERACY?
In simple terms, financial literacy is basically how to balance your income and expenditure over a period of time. The basic rule of thumb to being financially literate is that your expenditure should always be less than your income. Most young people do not know how to keep track of their income and expenses, neither do they know how to multiply their income and at the same time cutting down their expenses.
Here are some essential money skills every students should learn:
1. Budget and save:. As students, you mostly obtain money as stipends either from parents or family members, these stipends can come in periodically, probably weekly or monthly.
You should be able to budget the money based on 3 criterias: a. Budget based on essentials that you need for a given period, essentials such as food, books and other necessities are first taken into consideration, remove and set aside the amount you need for these necessities.
B. Budget and set some little amount aside for emergencies, you never know what might come up later and you might need money to get yourself out of some situations.
C. Budget and save money towards a goal. Saving is good, but saving money without having a goal in mind can lead you to spend the money on less important things later on.
When you decide to save money, you should have a specific goal for that money being saved. You could save money for that pricey item you’ve always wanted to buy or you could save money to invest in some sort of business. The rule of thumb is, always save money with a goal in mind.
2. Seek out ways to multiply your income:
While you may be receiving money from your parents, it is advisable you do not rely on them alone, especially if you have other siblings that are also dependent on them. This is not to say that you should engage in something illegal.
It’s very important that you seek out ways to multiply your stream of income, it is true that the main purpose of being in school is to study, but do not forget that some things that you engage in while in school can open up doors to your success in real life. So research and start doing something apart from studying alone. This can go a long way to help you.
3. Monitor your expenses:
This cut across various areas, monitoring your expenses doesn’t necessarily mean not spending extravagantly, it could also mean buying only what you deem necessary. Sometimes it’s not necessary to buy a brand new textbook, when you can always purchase a used one for half the price. Keep a record of how much you spend and most of all always make sure you get the best deal for all your purchases.
The above are just few basic tips on how to manage your finances. Make more research on other ways to be financially literate, make sure you read books and learn from people. Before long, you will notice a considerable change in your financial habits.
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