Suhaan Kumar, 22, is preparing to study abroad for his master’s degree this year. Alongside his academic journey, he will experience new responsibilities, including managing his finances. How should he approach budgeting and handling his money in this new phase of life?
One key lesson about money is that it’s a limited resource, always with an opportunity cost. Kumar must learn to allocate his monthly allowance carefully. Many students start the month with a healthy balance but end up struggling by the end, often cutting back on necessities. It’s also common for students to rely on small loans from friends or credit from local shops. Kumar should treat his allowance as a fixed amount, which will help him manage his spending effectively.
A student’s expenses typically fall into two categories: mandatory costs, such as rent and utilities, and discretionary spending, which varies depending on available cash. Kumar should prioritize essential expenses like rent, bills, and Wi-Fi. Then, he can set aside a weekly allowance for non-essential spending to avoid running out of money too soon. It may also be helpful to push larger expenses to the end of the month, rewarding himself for sticking to his budget. Furthermore, Kumar may discover that his college offers many enriching activities that don’t require spending money.
This is also a good time for Kumar to consider a side hustle. Earning extra income through part-time work can boost his confidence and help him develop new skills. If he finds a job that fits his schedule, it will help him manage his finances better. Over time, Kumar will become more comfortable handling money and build positive financial habits.
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