The Student’s Guide to Personal Finance

Juggling your finances while striving for academic success and fulfilling student life is never easy. With inflation and the cost of education rising over the years, an increasing number of young adults find themselves in a mountain of debt by the time they graduate with little to no savings.

Important life lessons are often not taught in school but picked up through trial and error as you go through life. While most mistakes do not have an everlasting impact on your life, poor financial decisions can reverberate through your life for years.

Planner Bee explores the various aspects of personal finance as a student to help you better navigate and take control of your finances.

Importance of Personal Finance

Personal finance refers to how you manage your money in the present to help plan for your financial future. Although there are many aspects of finance, they can be identified under five main categories: Income, Spending, Savings, Investing, and Protection.

With increasing life expectancy, many have suffered from a lack of financial planning early on in life. Like a double-edged sword, you’ll either pay the price or reap the benefits of your financial decisions made today, years down the road.

1. Income

A common financial struggle among students is income, or the lack thereof. Being broke is often part of the student experience.

Income, or cash inflow, is the most fundamental aspect of financial planning as it determines your capability to make other financial decisions. You could work part-time, learn more about investing, or even start a business in your spare time. However, do keep in mind that your primary job as a student is to prioritise your studies.

Create a personal budget

Having a budget allows you to stay focused on your journey towards your financial goals. Budgeting is one of the money habits that you can learn during your schooling years that will serve you well for the rest of your life. Not only does it help you keep track of how you use every dollar, but it also teaches you to live within your means.

Read more: Create a Personal Budget You Can Actually Stick To

2. Spending

Spending, or cash outflow, refers to the money used for any expenses you have. Though easier said than done, reducing your spending allows you to set aside money to grow your financial wealth.

Although you do not have full control of your cash inflow, what you spend your money on is within your control. Identifying your “needs” and “wants” allows you to be more deliberate on your spending.

For starters, you could adopt the 50/30/20 rule which states that 50% of your income should be spent on necessities, 30% on wants and the remaining 20% is recommended to be stashed away. Do note that this is not a hard and fast rule and you should increase your savings percentage if you want to grow your financial wealth substantially.

Read more: Smart Shopping Tips that Reduce Overspending

Credit Cards: Should I get them?

It is generally not advisable if you are irresponsible with your spending as the penalty outweighs the benefits with the risk of ruining your credit score and going into debt.

However, having a credit card as a student has its upsides too. It allows you to start building your credit score while enjoying cashback rewards on expenses that you would already have been spending.

Read more: Best Credit Card for Maximising Cashback

Student Loans

Although education for Singaporeans is heavily subsidised, the cost of tertiary education still adds up to a sizeable amount. Hence, most university students would opt for a student loan to cover the fees while they are schooling.

Unlike credit cards, student loans tend to have a lower interest rate and you don’t have to start repaying until you graduate. The important thing to remember is it is still debt after all and you should keep track of the potential monthly payment after graduation.

Read more: Best Education Loans for University Students in Singapore

3. Savings

Savings is the amount of money from your income that you did not spend.

As students, you are entitled to many benefits, such as student meal discounts and exclusive promotions. Fully utilising such benefits allows you to have a vibrant student life while maximising your savings.

Set Up an Emergency Fund

The most important step in personal finance is to set up your emergency fund.

As the name suggests, this is the fund set aside to only be used when you find yourself in a financial distress and dire need of money. Your emergency fund should be accessible on short notice. Hence, it should be placed in a savings account.

How much should I set aside for my emergency fund?

The general rule of thumb is to put away three to six months’ worth of expenses. This should ideally be an amount that can tide you through the temporary financial hardship without having to take on debt.

Check out Planner Bee’s emergency fund calculator to help you estimate how much you need to put aside for a rainy day.

Read more: What’s an Emergency Fund and How Much is Enough?

4. Protection

Protection is handled through a variety of financial products such as annuities and insurance. These provide financial security from any unexpected financial disasters.

Despite the negative stigma around it, insurance is important for everyone of all ages and that includes you. Trying to navigate health insurance as a student can be tricky as you are unsure of what plans to get or if you could afford the premium.

The general advice is that basic coverage is a must. You would not want to wipe out your previous savings for the end-of-year trip just to pay for the medical bill due to an unforeseen accident.

Read more: A Fresh Grad’s Guide to Insurance Policies You Should Get In Singapore

5. Investing

Unlike savings, investing refers to making investments, which are purchases that can allow you to earn future income. Investing is also different from savings in terms of the risk level.

Like most Singaporeans, you would have been taught growing up to save for a rainy day. However, saving alone is never enough. The value of your money left inside a bank account will decrease over time due to inflation.

There are many types and forms of investments, each with its level of risk. The suitability of investment mainly depends on your goals and risk appetite. Investing is a very broad subject with seemingly bottomless depth and can be intimidating if you are just starting. Planner Bee has the resources to help you learn more about this topic and hopefully allow you to better manage your finances.

Read more: Investing 101: What You Should Look Out for As A Beginner Investor


Finance can be a daunting topic if you are just starting. However, this is a lifelong study and a constant learning process so every small step counts. We hope that this article has given you some exposure to the various aspects of personal finance and aided you on your journey to a better relationship with your money.

If you are still a student, the most significant advantage you have against grown-ups is time. Schooling years are the best time to turn your financial struggles into money skills and habits that will serve you for life. Make full use of this time to learn, fail and improve yourself.

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