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2 SIMPLE Steps to Start Saving Money as a Student in 2021!

Updated: Oct 14, 2021

As students, we are often given a pass when it comes to managing our money responsibly.

After-all, how much damage can really be done with a casual job and barely enough money to buy food?

Well, as it turns out, A LOT!

While we are young, although most of us don’t need to worry about things like providing for a family or mortgage repayments, the way we think about money should be a major focus in our lives and definitely NOT something that we label a ‘future-me’ problem.

This is because it is the small, seemingly insignificant, decisions we make right now that have magnified consequences on our futures, whether good or bad!

So, to ensure you are heading towards the good, let me propose a 2 step formula to get you started:

  1. Get motivated

  2. Build habits

Sounds simple right?

Well congratulations, you have just learnt a fundamental concept for winning with money: KEEP THINGS SIMPLE!

Contrary to what you may think, effective money management starts and ends with simplicity. So, remember that!

Now, back to the 2 step formula.

I know it can be hard to get motivated for something like personal finance but hear me out...

You may have heard that we humans are more motivated by the fear of loss than we are by the potential of gain. So, let’s use this to our advantage and build up some serious FOMO.

Have you ever thought about buying your own car, going on a 6-month European holiday or even better, giving back to your parents or supporting a charitable organisation that is close to your heart?

I’ll even take it one step further.

Have you ever thought about what it could be like to have the freedom and independence to do ALL of those things? How would it make you feel to have complete control over your life and the ability to do whatever it is that may be important to you?

If that sounds like a worthwhile goal to you then you’re in luck!

All of the things mentioned above are within reach, in fact, at this young age and with time on your side, you couldn’t be in a better position to reach them because of a phenomenon called 'compounding'. But don’t worry yourself about the specifics of compounding at this stage, as you start to build your knowledge about personal finance you will become very familiar with it.

For now, just know that with a little bit a focus, consistency and intentionality your ideal life is practically already yours.

BUT, if you neglect to think about your money, if you drift through life without intentionality, without an aim, you will begin to see your future drift away.

With this mindset, your ideal future will no longer be an unattainable dream and something you need to gain but rather something already in your possession which can be lost very easily...

So, let’s make sure you hold on to it!

Okay, so we have built up motivation and have some skin in the game (so to speak) … What now?

Well, like most things, having the right mindset/motivation is an essential first step but will only take you so far...

So, this is where building habits comes in. In the personal finance space, there are many valuable habits you can benefit from:

  • Living on less than you make;

  • Tracking your income;

  • Building your financial literacy;

  • Avoiding consumer debt;

  • Investing consistently.

The list goes on and on.

But when it comes to truly taking control of your life and building habits that will last, there are just 2 rules you need to keep in mind:

  1. Aim to make just one decision each day that will make your life better.

  2. Master the Art of Showing Up.

Once we have recognised the need for change in our lives, it can be tempting to try and fix everything at once.

We may say things like “I need to 10x my income in one year”, “I need to work out for 4 hours a day 7 days a week” or “I need to get 100% in all my exams.”

While knowing that you can do more is extremely important, you want to set yourself up for the highest probability of reaching your goals and biting off more than you can chew is not the way to get there.

When building habits, consistency is key and the 2 rules above will help you make the lasting change needed to better your life.

As the first rule states, to begin, just aim for one good decision each day that would result in you being better than you were yesterday.

Whether that be, deciding to cook something at home rather than ordering UberEats, waiting at least 24 hours before making a purchase or saving 5% of the income you receive.

When moving towards a worthwhile goal, we often take on more than we can handle and this can result in burning out and ending up back where we started.

You need to set yourself a goal that is challenging enough to push you but not too challenging that you crumble under the pressure and aiming for just one good decision each day is the great way to start.

Now, some of you may be thinking...

“Only 5%! That is not going to push me!”

But this is where showing up comes in.

As James Clear says in his book ‘Atomic Habits’, “the truth is, a habit must be established before it can be improved.”

Showing up involves breaking your larger goals into small achievable increments.

For example, you may have a goal to save more money. So, instead of aiming to save half of your income because you can do it this week, you start by committing to saving just $10 a week.

Although this may seem trivial, you are showing up, you are establishing the foundation for the habit and developing a positive feedback loop for this behaviour and once you have mastered that amount and you are not constantly taking money out of your savings for silly things, then you can look at increasing the amount.

This is how it works:

You decide to do something to improve your life -> You make an incremental step and a achieve a small goal (you make progress) -> You get satisfaction from achieving that small goal -> Your life gets incrementally better. --> You are encouraged to continue and develop larger goals. The process repeats itself.

Humans are habitual creatures and once a habit has developed, it can be very difficult to get rid of, regardless of whether the habit is good or bad for us.

So, while we are young let’s take control, let’s set a good foundation and not miss out on what our lives can be.


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