Source: iStock.Photo

Managing finances during college years is an essential skill to help students avoid excessive spending. According to Faculty of Economics and Business (FEB) lecturer at Universitas Tarumanagara, Fanny Magdalena, students need to understand the basic principles of financial management in order to maintain financial stability and achieve their financial goals.

1. Set Spending Priorities
Students should learn to distinguish between needs and wants. Essential expenses such as meals, transportation, and academic necessities should come first, while entertainment spending should be adjusted according to financial conditions.

2. Get Used to Creating a Monthly Budget
Creating a simple budget helps students track where their money goes. A budget can include routine expenses while also allocating around 10% for unexpected needs to maintain financial security.

3. Record and Limit Expenses
Keeping track of expenses helps students evaluate whether their spending aligns with their plans. Expenses can also be categorized, such as food, academic needs, entertainment, or self-rewards, making it easier to control spending limits.

4. Set Aside Savings Early
One important financial habit is saving a portion of money immediately after receiving a monthly allowance. This method helps build discipline and encourages the mindset that saving should be a priority, not merely what is left over.

5. Avoid Habits That Trigger Overspending
Several factors can lead to excessive spending, including social pressure that encourages a FOMO-driven lifestyle, unnecessary subscriptions, paylater services, and impulsive shopping habits on online marketplaces.

6. Plan Finances Before Traveling
Traveling is still possible with proper financial planning. Students can adjust destinations according to their financial capability, prepare a travel budget, save consistently before the trip, take advantage of promotions, and prepare emergency funds.

By understanding and applying basic financial management principles, students can become more disciplined in managing their money and avoid uncontrolled spending habits. (VC/YS)