College life is full of fun but there is one problem lifestyle inflation, When we get a little extra pocket money or money from a part-time job we start buying a new phone daily Starbucks or fancy clothes. This lifestyle is called creeping and because of this our savings become zero, or we can even take on debt.
Stats say 54% people live paycheck to paycheck even with the extra cash yep, this is the data for 2024. in this article we will tell you how to have fun in college and also save money.
We will give you the 50/30/20 rule, smart budgeting and some small tips that will help you smash your financial goals. Are you ready? Come on, read it and learn how to beat lifestyle creep like a pro.
What Is Lifestyle Inflation And Why It Matters For College Students
lifestyle inflation means when your money increases and you also increase your expenses. Like earlier I was happy in hostel now when I got a part-time job, I rented a solo flat was it a necessity? These small things become lifestyle creep.
It is important to avoid this in college because money gets tight and there is also the burden of student loans. With a little planning you can create an emergency fund and chill for the future Keep it simple.
Use The 50/30/20 Rule To Budget Smartly
Have you heard of the 50/30/20 rule This is a simple funda of budgeting. The money you earn monthly like a part-time job or pocket money should be divided into three parts 50% on needs rent, food 30% on wants movies, coffee and 20% on savings or loan repayment.
Suppose, you get 10,000 rupees – 5,000 needs 3,000 wants 2,000 savings. Easy isn’t it Track it using apps like Moneycontrol or Splitwise. If the rent is too much then adjust the percentage a little. And auto-transfer the savings to the bank so that it isn’t spent.
How To Beat Lifestyle Creep With Intentional Spending
How to defeat lifestyle creep? Simple spend wisely. Wait for 48 hours before throwing money on everything think if it is needed or not. Like, instead of wearing a new jacket,wear an old style. Check your Netflix or Spotify subscriptions is everything necessary?
And the biggest hack pay yourself first. Put 20% every month directly in a savings account ideally in a high-yield one. Don’t get tempted by seeing people’s reels on social media. Set your goals emergency fund or post-college trip and focus on that.
Set Realistic Financial Goals To Outsmart Inflation
How to avoid inflation? The prices of everything are increasing, so saving is necessary to outsmart inflation. Set small goals like an emergency fund of Rs. 10,000. Suppose if you can save Rs. 500 per month it will become Rs. 6,000 in a year.
For a 21-year-old student savings of Rs. 10,000-20,000 is a good target depending on income. Check the budget every month so that extra money comes in so that expenses do not increase. This small saving will be a big game changer in the future brother trust me.
Examples Of Fixed Expenses And How To Manage Them
What are fixed expenses These are expenses that are fixed every month rent phone bill or the EMI of a student loan. Tips to manage them share a flat with roommates, get a cheap phone plan or find a deal on utilities.
Take a fixed-rate loan for student debt as in floating-rate money can increase with inflation. Fit these expenses in 50% of your income as says the 50/30/20 rule. This will also avoid lifestyle inflation and keep the budget under control.
Opinion:
The enjoyment of college life is important but lifestyle creep starts when you start considering everything as a must-have. Sometimes a movie or a coffee date is okay, but not every week. Moderation is the key treat yourself but focus on the goals.
Saving 10k by 25 or 20k by 30 is possible if you start now. Don’t consider budgeting boring it is your superpower With this you can live a chill life even with inflation, you can become debt free and you can fulfil your dreams in the future A little discipline now.
FAQ
What Is A Realistic Monthly Budget For A College Student?
Budget depends on the city and income but the 50/30/20 rule is perfect. Let’s say 15,000 rupees come 7,500 on needs (rent, food) 4,500 on wants (shopping, coffee) and 3,000 on savings. In an expensive city increase the percentage of needs a bit, Track it using apps like YNAB or Wallet so that you can stay within budget.
How Much Of My Paycheck Should I Save As A College Student?
Save 20% of every paycheck as in the 50/30/20 rule. Suppose if you get Rs. 10,000, then put Rs. 2,000 in savings, If you are a little tight then start with Rs. 500, but set up auto-transfer to a high-yield savings account. Even small savings make a big difference in the long run brother.
How Can I Survive Runaway Inflation As A College Student?
To avoid runaway inflation keep your budget tight. Focus on needs cancel subscriptions and use student discounts (like Amazon Prime Student). Try a part-time job for a little extra income, Create an emergency fund put money in a high-yield savings account Buy food in bulk to save money.
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