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3 Personal Finance Lessons That Undergraduates Should Know




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Other than academic grades, what makes an undergraduate stand out from his peers literally are what he/she wears and who he/she hangs out with.

People are likely to hang out with people who are similar to them, such as having mutual interests and hobbies, and more often than not, we see that our friends, and family, often affect the way we perceive money and taking note of our spending habits.

As my final semester draws to a close, I would like to highlight 5 lessons that every undergraduate should know.

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Related: 6 Money Tips Millennials Can Learn from Their Parents

Save Money on Brand New Textbooks by buying used ones

The bane of every college student is buying new textbooks at the start of the semester, and these textbooks, at the university level, do not come cheap.

What’s worse is when a publisher releases a new edition of the textbook, which comes with the impression that previous editions are “worthless”. Yes, they are cheaper on the resale market but that does not mean they may be worthless. It is safe to say that after 4 years in university, the newer editions do not come with major edits, especially when it comes to learning the key concepts.

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If you have had friends who have taken a module before, often the best way would be to borrow the textbook or offer to buy at secondhand prices.

If you really need the textbook, you can buy the textbook for almost half its price online such as looking out for international editions, or on popular local websites and apps like Carousel. For students studying at NUS, there is an internal used textbooks forum.

Related: 5 Silly Things People Do When They Think They Are Saving

Financial advisory services are all the rage today, but that does not mean that your financial advisor has your best interests at heart.

In other words, selling the insurance packages with the highest payouts is more tempting for the agent to do.

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I had previously written an article on “How To Manage Your Finances Without An Advisor” which attracted a lot of views, and I continue to reiterate that you are likely to understand your own finances when you manage them yourself.

How is this relevant to what an undergraduate should know about?

As can be seen, most financial advisory love to target and recruit undergraduates as financial advisors, which is what most brands love to do as well. Target your consumers early, market a product to them and allow them to grow with the brand.

Where these undergraduate advisors are likely to succeed is when their peers start earning their first pay cheques, and after subsequent ones, it becomes easier to push an insurance package to them as the perceived costs are lower with each and every pay cheque.

While there is nothing wrong with this, it becomes a nightmare when a friend in university just received his/her financial advisory license and begins asking you out for coffee. Not to mention that there lies a possibility of that friend being allocated in the same project group in the future.

That said, if you’re serious about early retirement, regular planning ought to become a habit and to make use of the free information that is readily available on the internet.

Related: Investing with Your CPF Savings: A Quick Guide to Get Started

Credit Cards are not as attractive as they seem to be.

Flashing something that your peers do not have may seem attractive, but they tend to burn a hole in your pockets. Not to mention that Citibank credit cards give you free entry to Zouk.

A recent survey of undergraduate business students published in the International Journal of Business and Social Science found that 90% of student cardholders carried a balance from month to month and that fewer than 10% knew their card’s interest rate. (This refers to the amount that they would be charged if they made payments late or went over their credit card limit.)

Unlike the concept of debt that we learn in macroeconomics, there is no such thing as “good debt” in personal finance. Moreover, using credit cards recklessly can cause financial hardships to snowball and you may find yourself spending more time attempting to clear the debt than travelling to school for lessons.

To avoid the debt trap, students should forgo cards at least until they have a full-time job.

Related: Your Decade-By-Decade Guide to Financial Wellness


In conclusion, it is no coincidence that credit problems tend to hit early in life and that these bad spending habits, if not corrected, can have lifelong repercussions.

Related: 5 English Movies That Teach Us About Money Management

This article first appeared in blog.seedly.sg

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