College life coming to an end? Soon you will start earning and exploring investment options for students. Don't you think understanding these investments would be a great idea to kickstart your finances? Read on to figure out the best investment plans for students and a step-by-step guide.
Before searching for investment ideas as a student, it's essential to assess your finances. Understand your income sources, such as part-time work, family allowances, and scholarships. With limited cash, you can manage expenses like travel, food, and leisure activities. Tracking every expense is crucial to identify spending patterns. Practice delayed gratification and avoid impulsive buying to align your purchases with your financial goals.
By analyzing your spending habits, you can create a monthly budget to manage your finances better. Divide your budget into sections: fixed expenses, which include essential costs like travel and college expenses, and flexible expenses, which cover leisure activities such as movies and shopping. Calculate your net expenses by combining fixed and flexible spending. Your net pocket cash comprises the money you receive from various sources like pocket money, part-time work, and cash gifts.
Even after knowing about your flexible expenses, you might be unable to manage them. You might still spend the same or more on these expenses, leaving little or no room for investing. A solution to this is investing before spending. Inculcating this habit helps you regularise your investments, as you can manage your flexible expenses with whatever is left. Curious to learn about the magic of compounding on your investments and how to invest regularly, check out this video: https://www.youtube.com/shorts/2rsKlYg7KR4
Identify your goals to understand why you want to invest. Whether for a new gadget, a trip with friends, or any other goal, ensure they are specific, measurable, achievable, relevant, and time-bound (SMART). Here’s an example of a smart goal: Consider buying a new gadget, a tablet worth ₹10,000 next year. You can divide your investments into 12 instalments of ₹835.
But where would you invest this money? What would be the best investment for students?
Now, you can save for your financial goals at your convenience. Check the Fi money app and create a Jar for your goal. You can name your Jar per your goals, say, “X-box purchase,” and start saving instantly in a few simple steps. Track your journey to buying your new tablet and reach your goal with ease and commitment.
Discover investment ideas for students, including various types of investments, their risk profiles, and how to invest in them. Learn about prerequisites such as eKYC for mutual funds and a Demat account for stocks. Explore the suitability of different investments for your goals and time horizons. This knowledge will guide you in finding the best investments for students, senior citizens, and professionals at different stages of life.
Investing for your financial goals is now simple with the Fi money mobile app. Just download the app from the Play Store or App Store, complete the bank mandates and start your SIP (Systematic Investment Plan) in just a few clicks.
To invest in financial products, ensure you have a Permanent Account Number (PAN) card and link it to your Aadhaar card for income tax purposes and potential TDS refunds.
With all these learning steps and selecting various investment options for students, it’s time for you to start investing. Taking this step can be difficult. Once you have decided where to invest, you can start your investment journey with your chosen investment products.
The first steps are crucial, whether in life or in investments. Therefore, it is important to make informed decisions by knowing your finances, budgeting, controlling expenses, forming financial goals, learning about investments and lastly, getting started with your investments. With each investment, you gain experience. With each financial goal, you will become confident. And, with each passing year, you become more financially secure.
For a student, the mediums to earn money can be limited to pocket money, part-time or freelance work and rewards and gifts. Therefore, they can invest their money in a low-risk investment that can allow them to invest in small amounts. But before that, you need to know the steps to make informed investing. These are:
Until you reach 18, you’re considered a minor. Your modes of cash as a minor can be your pocket money, part-time or freelance work, rewards and gifts. By not being in a regular full-time job, your sources of income would be limited. You can even make money from your regular cash supplies by investing them in instruments like mutual funds or saving them in deposits.
Mutual funds are a viable option for young students with limited income sources. Students can begin with modest investments from their own funds, typically around Rs 500-1000. It is advisable for college students to opt for mid-cap mutual funds and maintain a long-term investment approach to maximize potential returns.