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10 Basic Finance Management Rules for Students

 Tips from professional business essay writers won't tell you how to become richer. These ten basic rules may be called a definition of financial management for modern people. They will help you manage your finance cleverly: save money, spend them rationally, keep and invest them correctly.

 

Funds management

 

The text can be especially useful for students. They frequently are people on a budget, even despite having a part-time job. Education is an expensive activity nowadays, so finance management knowledge is a must for every student willing to become successful.

1. Spend Less Finance than You Earn

In 1960, Stanford University scientists organized a famous Marshmallow Experiment. Scientists offered marshmallow pieces to a group of children. Then, they said they would leave for some minutes, but if kids would be able to wait and not to eat their piece, they’d receive one more marshmallow as a reward. As a result, only 30% of children were able to resist the temptation and get their rewards. Years later, these kids showed higher success levels in multiple life fields.

The ability to control your wishes and save money is a key skill leading you towards financial freedom. Here is a tip: try developing a habit, a finance management rule to save at least 10% of your monthly earnings. You’ll be able to supply yourself using the rest 90%, won’t you?

Why do you need such personal funds management moves? In the future, you'll be able to create passive income sources, have reserve funds, or collect enough money to buy something expensive with this capital. 

2. Funds Management: Basic Needs First

Let’s suppose that you have a certain sum of money and need to decide whether you should save it to buy a house later or spend to have a good vacation in a week? Here, the right choice will most likely be the first option: to satisfy your basic need of having a place to live. Spending money on entertainments is possible only after the house is yours.

3. No Impulse Purchases

The short story from a real person will suit here perfectly:

"Once I visited another city and came to a big book market. My passion for books was too big. I couldn't avoid getting stuck there for a couple of hours. As a result, I came out of the market with a bunch of books in my hands. They did not only make me tired till I came back home, but additionally, I have never read any of those books. I spent a little money, but this purchase was pointless."

Here is another fact: till the end of 2019, the world advertising market should reach the capitalization of 625 billion dollars. Do you know what a top percent of this money serves for? It is called to make you break this finance management rule and go in for impulse purchases.

The best way to avoid them is to plan your finance. Plan your budget every month. Underline required payments (bills, transport, Internet, cell phone, etc.), and then divide remaining finance resources into categories: food, entertainments, savings and other.

4. Account not Only the Price of Something but the Finances to Maintain it

When deciding to buy something, account hidden expenses are not included in the overall indicated price. Finance example: buying a car means you'll spend money on petrol, parts, insurance, tech maintenance, etc. A trip abroad means you will not only pay for the tour, but also souvenirs, additional excursions, and emergencies. Take this factor into account and always provide finance management, including maintenance budgets.

5. Finance Management Guide: Create Reserves

Any state or private business has reserve funds in their finance budget structure. The existence of such reserves is caused by the unpredictability of the world we all live in. Financial crises, job loss, sudden disease, court call from a toxic person: all there “black swans” can exhaust your regular accounts in a moment. Create your reserve finance backup storage for emergency cases.

6. Track and Analyze How You Spend Finances

The sixth recommendation is quite simple: just track your money spending within a month, and you’ll most probably notice interesting tendencies able to wonder you. As a result, many possibilities to save money will appear.

It is possible either to collect shopping bills and write down sums into a notebook or to use some personal finance management app. Both ways are fine.

7. Learn How to Save Money

Yes, saving money is a skill meaning a conscious approach towards buying things. You should never choose the very first item you’ve got. Spend some time to study the market and choose more profitable propositions. Use discounts, cashback services, and anything that may help you save a bit of fund, but do it without becoming a zealot of management and economy.

8. Look for Passive Income Sources

A smart person works for money, while a wise person has money working for him or her. The paradigm of passive incomes looks close to that phrase. If you managed your finance correctly and saved money well, then with time, you should have a small capital. Now, it is the most crucial step of your finance management and freedom: try to create a passive income source.

There is no need to describe why passive incomes are great: you most probably understand profits yourself. So, just try looking for investment possibilities. They can be businesses, deposits, stocks, obligations, and anything potentially able to bring you money without your direct participation or management.

9. Finance and Risk Management Rules: Diversify Them

Do you remember how Robinson Crusoe saved his gunpowder before lightning strikes? He just divided it into several portions and brought to different places. The powder was his principal capital, and he provided comprehensive risk management.

You should do the same thing. Keep your finance in different banks, in various currencies and use diverse income sources. It will help you save finances before inflation, crises, thieves, and other emergencies.

 

Money management rules

 

10. Financial Safety is a Must

In a modern world, it’s not enough to hide your money inside a chest to protect it from bad people.

The more we switch to electronic banking and e-commerce services, the more danger follows our money. Earlier, people had only some cash inside their pockets, while the rest of their finances were in banks or other safe places. Nowadays, hackers can break through thousands of bank passwords at once and get to significant sums quickly. That is why you should keep some money as cash, and think out complex and reliable passwords for electronic wallets. 

These 10 basic finance management rules will help you be more careful when interacting with funds. But of course, there are much more secrets in finance management, and if you want to know them, try reading books by Warren Buffett or Robert Kiyosaki.

Start saving money as a student: it will help you earn more after you graduate.  

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