The issue of student fees and free education attracted significant attention throughout 2017 and it looks set to be a topic which will almost certainly take centre stage in the upcoming State of the Nation address and the Budget Speech later on in February.
“Student fees remain a significant issue for thousands of students around the country struggling to make ends meet, while trying to obtain a tertiary education,” Taryn Schmidt, Head of Marketing and Comms at short term loans company, Wonga South Africa.
More millennials are going to college or university than in any generation before them, which also means that many enter the job market crippled by student loans. Consequently, this group faces a unique set of challenges and as such, the financial advice provided to the generations preceding them isn’t a good fit 100% of the time.
Schmidt shares six financial survival tips for these students as they go into the first term of 2018:
- Bulletproof budgeting
“The first step towards ensuring that students can see through the year on their funds is to develop a proper budget. It’s the one thing where people tend to overlook expenses – causing them to overspend,” believes Schmidt.
She explains that students need to remember to incorporate ‘hidden’ fees like bank charges and interest on their student loans in their budgets in order to get a true reflection of how their funds are being spent every month.
- Living on your own is over-rated: get a roommate or move back home
There isn’t a student who doesn’t dream of getting his or her own apartment, where they spend their student years living independently of mom and dad. It may sound glamorous, but the bliss of freedom only lasts until the clean clothes run out. Living alone is expensive and the last thing to be doing when saddled with student loans is racking up more debt.
“While it might seem like an inconvenience, it’s better to be financially smart and get a roommate to split living costs with (rent, utilities, food, etc.) or, if possible, to move back home where board is cheaper or even free while you get yourself on your feet with your first job,” advises Schmidt.
- Beware of store cards
Buying clothing or other items on credit by signing up for store cards can be very tempting, especially when cash flow is an issue.
“It’s probably best not to get a store card if your budget is already tight as most of these do charge interest. If you do decide to get one or two, it’s important to know what sort of interest you’ll be charged and to manage spending on these cards carefully,” says Schmidt.
A quick look at a few of the most popular store cards reveals that they charge high interest rates after often tempting new customers in with initial interest-free periods.
- Learn to cook
This isn’t about going to culinary school – rather it’s about learning how to prepare five to ten different meals, which can be enjoyed for dinner and the leftovers eaten at lunch, or frozen for another time. A week’s worth of eating out, even at fast food restaurants, can easily cost a month’s worth of groceries. Do a bulk grocery shop, cook a large dinner, portion it out, and have six meals, if not more, which will save a lot of money on food.
- Focus on the little savings
Turn off the lights when leaving a room, be conservative with water, make coffee in a flask at home rather than buying expensive take-away coffee from coffee shops, take public transport rather than Uber where appropriate, and with every buying decision, choose the less expensive route, option, product or service.
“A quick example would be saving R5 on a 9-pack of toilet rolls. This might not seem like a big deal on its own, but if you’re saving an average of R5 on most of the items in your trolley every time you shop, it adds up. And if you apply this philosophy to every spending avenue, you’ll cut your expenses by a significant amount,” says Schmidt.
- Don’t try and keep up with the Joneses
Seeing friends and favourite social media influencers eating at nice restaurants, buying expensive cosmetics, shopping at trendy clothing stores, travelling to exotic destinations, and generally living the good life can compel many to live beyond their means. Just remember: at the end of the day the bills come due and it’s better to stick to a limited budget while studying, than spending the first years of a career trying to pay off massive debt.
For more budgeting tips and financial information visit. www.moneyacademy.co.za