How to Save Money as a Student- 5 Excellent Tips!

How can you save money when you have a low income? This is one of the most difficult questions to answer at any given time. Who, more or less, has been afraid to watch how the account's digits are dwindling, or worse, turning red? That is when the necessity to preserve, even if it means limiting food, becomes critical. It is vital to treat the situation seriously, but it is not necessary to dramatize it. You can save, but it will be difficult, especially if your pay is low. 

However, even if the wage is adequate, the difficulties in saving might be comparable to that of someone earning a low salary, due to the wants that we make for ourselves and the lifestyle that we have adopted. If your main source of money is a wage, the first thing you should realize is that there are only two methods to save: spend less or find another source of extra income. This is a Perogrullo axiom, or in castizo, a truth. 

Spending less does not imply eliminating all expenditures, since some are necessary and inevitable, but rather learning how to spend money in such a manner that part of it is saved from burning and gradually accumulates into a tiny reserve fund from which to get future benefits. There are several tactics, ideas, and advice available on the internet to help you save a few euros at the end of the month. 

It's fine, anything goes if you achieve that goal, but it's not about having a bad time either, it's about rationalizing our spending to use our money in the most efficient way.

1. The 50/20/30 Formula

There is now a circulating mystical formula known as 50/20/30, developed by a Harvard University professor, that will assist us in organizing our economy. It won't hurt at a time like now, with the Christmas holidays approaching and the tempting bargains that will follow. The strategy is straightforward: set aside 50% of your salary for basic requirements, 20% for savings, and 30% for personal whims and non-essential spending.

a. Save 20% (Pension Plans not Included)!

Everything that cannot be done without would be considered fundamental needs: food, clothes, housing, and required costs (insurance, car, breakdowns, energy bills, communication, etc.) The most challenging task is to adjust all of these costs to this proportion. Pension plans should be included in the 20% set aside for savings, a savings formula that should not be overlooked given the landscape that lies ahead. It's a good idea to start early, even if retirement seems a long way off, to get more benefits. 

Bank accounts do not now offer any interest like a savings system; they only act as piggy banks to keep money out of our hands and away from temptations. If you have managed to save a little amount of money and want to expand it, you may try investing in the stock market, but only with extreme caution and prior consultation. There is an adage that only money that is left over should be invested in the stock market since it will not be needed in the short or medium term. 

b. Invest in Mutual Funds and Insurance (From that 20%)

Each individual must consider the convenience or inconvenience of this alternative, which is not without risk, but if it works out, it may bring a significant gain in the capital. Mutual funds are another wonderful choice because they are very inexpensive. It is possible to achieve a greater return on our money in the medium and long run if we are well-advised. 

Insurance on one's life can also be regarded an excellent savings strategy since it can ease a crucial family scenario in an unfavorable time when a particular amount of cash is required to move forward.

c. Cut down Expenses (Even 30% is Extravagant)!

However, allocating the remaining 30% to expenses that are not strictly necessary and whims, such as leisure activities, trips, restaurants, and the purchase of specific items (clothes, books, music, gifts, etc.) appears to be a bit excessive, because those expenses, if they are not strictly necessary, can be avoided. You can and should place the scissors in the bag without hesitation in this situation.

In the end, this strategy is just as excellent as any other. Its goal is to set percentages to help us arrange our finances and know-how to specify expenditure, and it also demands attention and rigor in order to avoid exceeding the restrictions it imposes on us.

2. Other forms of savings!

a. Avoid Borrowing!

Other factors might also be explored in order to limit consumption and make savings. In the case of housing, for example, avoid borrowing more than the maximum percentage limit imposed by income, which can be about 35 or 40 percent. 

Personal loans should be included in this level of indebtedness for home modifications, the purchase of furniture or new automobiles, excursions, and so on, which are not always essential and may be postponed. having some money set up to carry them out

b. Set Achievable Goals and Keep Spending Records!

Setting objectives is also a good way to enhance your savings. Perhaps the 20% of the approach we discussed is a bit excessive for our income because, with only 50%, even the required costs cannot be satisfied. To minimize disappointments and tensions, it may be best to lessen expectations and create more achievable goals.

Another critical aspect is keeping a written record of spending. This, while it may appear easy, is actually highly beneficial in identifying the issue areas where expenditure is triggered and, as a result, being able to take efforts to close the gap.

c. Avoid Discounts however Compelling they Are!

Compulsive purchasers are the sort of person that has it rough when it comes to saving. As if that weren't enough, the company manages to devise new tactics and claims every year in order to obtain what little money they still have in their pockets. You must maintain your resolve, and no matter how great of a discount is provided, deals, if you don't need them, don't buy them.

d. Find Extra Sources of Income!

Another way to save money is to work extra jobs if you have the opportunity, as long as the money goes straight to a savings account or financial investments and is not utilized for other sorts of costs.

To summarise, as we stated at the outset, the guideline for saving, regardless of our wage, is quite simple: do not spend on useless items and, if possible, earn some additional money with side jobs.