Personal financial planning might be the last thing on any university student’s mind, but the financial decisions you make today will shape the rest of your life.

Here are six habits young people should cultivate sooner rather than later.

1. Plan a budget and stick to it

Budgeting is an essential first step to managing money wisely. Set financial goals such as paying off loans, saving for a simple holiday, or even spending less on bubble tea, then utilise your budget to help you reach them.

It is important to track your expenses to have a better idea of where your money is going and how much you really need. Create categories for each expense such as food, rent, transport, savings, and even weekly treats.

2. Manage your debt

Student loans can be seen as a good investment for the future. But while a student loan has lower interest rates than most, it is not free money, so be disciplined in repaying your debts as they fall due.

Your responsibility for repaying your loan is vital for future underprivileged students to gain education assistance as well.

Alternatively, look for scholarships, grants, and work-study programmes that don’t require repayment.

3. Get insured

Medical insurance isn’t just for the elderly – the last thing you want is to be hospitalised and burdened with debt while you’re still studying.

Pick a plan that ensures you are sufficiently covered in the event you fall ill. Speak to qualified insurance agents for advice, and compare plans to find the one that best suits your needs.

Note, also, that some tertiary educations provide student health insurance with their scholarship offers.

4. Create emergency and investment funds

Within your budget, proactively set aside a small sum of money on a weekly or monthly basis for two separate funds.

Start with an emergency fund, a backup cash reserve for the unexpected. Leave this in a savings account that can be accessed quickly if necessary.

Next, build an investment fund, and invest this cash no matter how little. Look for options with higher returns and compounding interest, but beware of scams and avoid legitimate ventures that require a lot of your time.

5. Earn money

Earning a wage comes with new financial and legal responsibilities. Whether it’s your first paid internship, a part-time job while at university, or a work-study programme, be aware of your rights and obligations as a worker.

• Malaysia’s minimum wage is RM1,200 a month and will be increased to RM1,500 from May 1.
• Employers are permitted to offer unpaid internships.
• Wages must be paid within seven days of payday.
• Employers are required to make statutory deductions in addition to paying wages.
• Employers must contribute to their employees’ EPF and Socso in addition to these deductions.
• Under federal law, employers cannot discriminate against employees based on their age, ethnicity, religion, or gender.

Review all employment contracts thoroughly before signing.

6. Practise discipline

Learning financial responsibility is part of growing up, and financial peer pressure from friends or classmates can destroy your budget.

Always apply financial discipline, even if your budget is effective or you have already begun to earn a salary. Assess your wants and needs and allow yourself a slight increase in your spending allowance, but always live within your means.

This article first appeared in MyPF. Follow MyPF to simplify and grow your personal finances on Facebook and Instagram.