Making The Most of Your Income as a Student

If you’re one of the many students who are self-employed, you deserve a round of applause. While it’s certainly easier freelancing these days than ever before, balancing it with your studies takes a mammoth amount of discipline. Without an office you actually have to go to, it’s all too easy to procrastinate and find other ways to spend your time.

Which is why when you do make money, you want to make it go as far as possible. Opening a student bank account is a good way to keep track of your money and spending habits. Rather than spending it all on the student life, you want to use it to get a good start at life as an adult.

Busy self-employed student

At the same time, you don’t want to miss out on enjoying your college years. You want to find a balance between throwing away your hard-earned money and being a reclusive spendthrift.

Here are some tips to help you make the most of your income while studying.

Use credit cards responsibly

Credit cards are not always a good idea – I don’t need to tell you that. If you use them with reckless abandon, you’ll end up with credit card debt that rivals your student loans. However, for those who are earning money and already building a career, a credit card is absolutely necessary. You will need to get a credit record, which requires you to show your propensity for paying back debt. A credit record opens up doors, including the option to finance a car, get your own mobile contract, and more.

Of course, you need to use your credit card with utmost care. It’s best if you don’t spend more than you can pay back immediately at the end of the month. This way, you can make use of the credit for the resources you need without having to worry about interest. If you do spend a bit more than you can pay back immediately, that’s fine too, as long as it does not continue growing on a monthly basis.

There are some credit cards perfect for college students. Take a look at the top credit cards to get started.

Treat your work as a business

When you’re freelancing as a student, it is tempting to treat payments as simple cash transactions. The client puts money into your account at the end of the month and the admin can come later.

However, this leaves you with tax complications, as well as difficulties making sense of how much you’re earning and what you can afford.

This is why you should treat your work as a business. Those who hire you are clients, not employers. Issue invoices rather than simply asking for money. And find out all you need to know about paying tax if you’re earning enough. Otherwise, that will eventually come back to bite you.

Budgeting expenses

Make two budgets

Finally, budgeting is of utmost importance. How else will you regulate what you spend in terms of what you’re earning?

But don’t make one budget for everything. Make a budget for personal needs and a budget for your business. This way, you can account for business expenses more easily, have a clearer idea of what money is available as disposable income, and make admin a whole lot easier.

There are some great budgeting apps to help you get started, along with apps which help young entrepreneurs with taxes and financial management.