A study-guide for financially fit futures
Ah…The life of a student…noodles, spring rolls, buy one get one free, exams, sunny days outside at the campus, late classes, no classes, living with a roommate, Res parties, getting wheels and of course furthering your studies…a whole new exciting world. However, the idea of going out into the world and facing student loans, living expenses at ‘res’, travel expenses, part time jobs and getting used to larger workloads can cause slight hyperventilation. But stay calm, because here are some easy to follow financial tips for campus life, and just like a study guide, the aim is to keep you one step ahead of the game.
Save, Save and save some more
Students who realise early that they need to start saving will reap the benefits at a later stage in comparison to a 30 year old that has only just decided it’s time to start saving. This is purely because students have fewer expenses. For example cutting down on socialising by merely one day a week could allow a student to save at least R100.00 per week. Multiply this by 4 weeks in a month, a student could save R400.00 a month, and R4 800.00 per year. By the end of an average 3 year varsity degree, a student has saved R14 400.00 – which is massive and could be used to pay back any debts or put a deposit down on a car. Save a ‘buck’ whenever you can by buying second hand books; looking for student deals at restaurants, bars and shops and cook meals at home instead of eating take-out – it could be worth it in the long run.
Research… not only something you do at the library!
If you have to take out a student loan, make sure you do some background research. This is as simple as investigating the average salary for graduates in your field and then determining how much debt you can reasonably afford. Remember, some student loans can even be paid off while you study – ensuring you keep the interest incurred on the loan to a minimum – so choose the option that best suits you.
Budgets, make them, don’t break them.
Budgets may seem restrictive, but if you can see where your money is going you will become more conscious of your spending. This will help you to plan what to cut back on. If you find you are spending more on entertainment than on food, you know your budget needs to be revaluated. Visually noting where your money is going can help you to set better goals.
Don’t spend money that you don’t have
Living on credit is a dangerous trap that many students may fall into. Putting a limit on your card doesn’t help either because you are still spending money that you don’t have. Not only are you paying back money you don’t have, you are paying back interest that hasÃ‚Â accumulated over a period of months.
To show that you are a young adult means stepping up to your new responsibilities. That student loan is yours, those car repayments are in your name and any other debt you have incurred needs to be paid. When you are young the thought of death doesn’t really cross your mind, but if you did pass away who would the debt be passed on to? It would unfortunately fall on the shoulders of your parents, who may struggle to pay off these debts. Taking out life insurance for example, is a way to make sure you are covered and that your debts are paid in full so that your family is free from any financial burdens after you have passed. Life insurance is very much overlooked when in fact it is so important to securing your assets and making sure your finances are well looked after. The monthly premiums are inexpensive and the policies are tailored according to your specific life stage, including students.
Time to spoil yourself
Once you have followed these guidelines any guilt you may feel towards going out for a night on the town pretty much disappears. That’s because you have thought about the future, you are on the right path to adulthood, with both feet on the ground your head in the right space.
Success is now yours for the taking, because you are financially secure! Doesn’t that feel good?
This article was written by Laurence Hillman, Managing Director for 1Lifedirect.