A Student's Guide to Financial Wellness: Navigating the Path to Success

September 21, 2023 | Québec City, Capitale-Nationale, Québec

Photo Credit: Firmbee.com on Unsplash

“Thriving independently demands a high sense of responsibility, and mastering budgeting is a great starting point.”

Financial well-being is a crucial element of our overall well-being, especially for students embarking on their academic journey. Often overlooked, the significance of sound financial management in the lives of students should be taken more seriously than we might think. As we enter the back-to-school season, with students launching into their academic pursuits, it's essential to keep in mind that financial well-being plays a fundamental role in their overall welfare. University life represents a new challenge for many—a new society, a new way of life where the sooner we adopt good habits, the better we fare.My first year of college was quite an experience, despite the ongoing pandemic and the various measures put in place to combat it. However, I believe it could have been even better if I had been better prepared for independent living. Thriving independently demands a high sense of responsibility, and mastering budgeting is a great starting point.

They say that the first steps are always the hardest. Here, I present a guide that explores six key steps I use to better manage and plan my expenses at the beginning of the academic year as a student.

Step 1: Define Financial Goals
Setting clear financial goals is essential. Having a comprehensive view of my goals and projects provides me with a sense of motivation, helps me maintain control to track progress, and allows me to measure the impact that any changes could make. Personally, I prefer to list my goals and projects in terms of priority, and whenever possible, I set deadlines for certain goals. This helps me create a budget.

Creating a budget helps me better understand my income and expenses

Photo credit: Towfiqu barbhuiya on Unsplash

Step 2: Create a Budget
I'll admit that I've never completely adhered to all the budgets I've set for myself. Nevertheless, I still find it important to estimate how much money I'll earn or receive during a given period, how much I'll save, and how much I plan to spend. Creating a budget helps me better understand my income and expenses. It enables me to align my spending with my financial goals, exercise control over my expenditures, and prepare for unforeseen financial emergencies.

Step 3: Build an Emergency Fund
After I've established a budget and estimated the cost of my projects, I promptly create an emergency fund. Let's face it; the life of a student is often full of changes. And as we progress, responsibilities tend to increase. An emergency fund serves as your financial safety net for unexpected expenses. Start small but remain consistent in your contributions to strengthen this fund.

An emergency fund serves as your financial safety net for unexpected expenses

Photo credit: Towfiqu barbhuiya on Unsplash

Step 4: Manage Student Loans
I've always considered student loans one of the first major financial decisions that young students make in their lives. Higher education is costly; we all know that. However, it remains a significant investment. For a student who has set the goal of managing their student loan responsibly, is aware of their budget, and has built an emergency fund, allocating a budget for loan management should not be too challenging, I hope. Responsible management of student loans is essential to avoid excessive debt. Understand the types of loans you have, explore repayment options, and strive to avoid default at all costs.

Step 5: Introduction to Investing
I understand that this part doesn't apply to everyone but let me still emphasise that considering investments in any field is a great idea during your studies. I won't inundate you with motivational speeches to encourage you to do so, but I'll highlight the fact that as students, we have the advantage of youth, which allows us to take risks. More importantly, we have a long investment horizon ahead of us. Investing can help your money grow over time. Even with a limited budget as a student, you can consider investing in stocks, mutual funds, and other options to achieve your long-term financial goals.

“Learning to organise your finances is a personal and ongoing journey. By embracing these steps, you're moving closer to a future of financial security and holistic well-being.”

Step 6: Pursue Financial Education
We never stop learning, and some concepts aren't always taught in school. Financial education is a key element in making informed decisions about money. Personally, I explore online resources, books, courses, seminars, and engage in discussions with others to enhance my financial literacy. As the saying goes, "Tell me who your friends are, and I'll tell you who you are." Learning to organise your finances is a personal and ongoing journey. By embracing these steps, you're moving closer to a future of financial security and holistic well-being. Your journey begins now, and the possibilities for a brighter financial future are within reach.

Author
Francis Shamba Ciza
Financial Wellness Liaison (Québec City, Capitale Nationale)
for Y4Y Québec