Budgeting For First-Time Students

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Leaving home to study for the first time is an exciting event filled with anticipation. This transitional period in one’s life is filled with new experiences, as well as a lot more freedom and financial responsibility.

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Leaving home to study for the first time is an exciting event filled with anticipation. This transitional period in one’s life is filled with new experiences, as well as a lot more freedom and financial responsibility.

While moving into your first flat or house-share is a thrilling and fun journey, you have to factor in your finances. And while this might sound not so fun, starting your first year with a financial plan will not only help you afford those all-important extra expenses like textbooks, but also make sure you make it to the end of the month without falling short.

Whether your monthly income comes from family, student loans, a scholarship fund, a student job or a combination of these, here are a few ways to get prepared in collaboration with Hippo.co.za.

Determine your expenses

Once you are aware of how much money per month you will be receiving, determining your expenses is the first step to take in figuring out your budget. Think about every bill, essential item and activity that might incur an expense, and write it down, with how much you expect to pay for each.

Once these expenses have been added up, you can compare the total to your monthly income and see whether or not you can live within your means.

It is always best to do your research before committing to an expense.

Is living in a university residence cheaper than sharing a flat with friends? If you are about to purchase a car, how are you going to pay it off? Never look at an expense at face value, as there are often more financially sound options available.

For example, if you are going to need financial help to pay off your car, there are numerous finance options available, but you need to be aware of what will suit your pocket best. Beware of ‘Rent-to-Own’ Car Financing Deals as, in the long-term, they may not be financially viable for a student’s budget.

Below is a list of essentials that should be on your expenses list:

Track your spending

A budget can take time to adjust to, so don’t despair if you didn’t get it right within the first month and you lived beyond your means. The first month or two usually involves purchasing expensive items such as a laptop, bedding and a desk, for example. The following months will prove cheaper as you will now be set up for the year ahead and won’t be required to purchase big ticket items.

One of the most important tricks to remember to keep within your budget is to track your expenses. Keeping on top of what you spend by keeping a list of everything you spent your money on, will enable you to look back at the end of the month and see where you overspent.

To make things even easier, there are a number of apps out there like Acasa, that help you keep track, with everything in one place on your phone. If you get to the end of the month, and you’ve identified which areas you’re over spending in, you can then figure out what to cut back on and how to do so. The evidence from your tracking will help you decide whether or not you need to choose cheaper options, or actually cut back on unnecessary items.

Keep the future in mind Once you’ve got used to what you can and can’t afford and you’re sticking to your monthly budget, you can start to think about whether or not you can afford to put a few Rands away every month. According to a survey conducted by 10X Investments, only 35% of all millennial respondents had some form of saving or investment up and running. Saving for your short- or long-term future will only help you continue your already great budgeting skills, and help you reach a personal goal.

Whether your goal is to go travelling with friends or family, or to purchase your very first car, saving should be an integral part of your monthly budget. Keep it within your budget; you don’t want to stress yourself out while you already have lectures, assignments and exams to think about.

So start small, and you can build your savings up year after year. While a budget can never be hard and fast, as expenses inevitably go up and down from month to month, it certainly helps to be prepared. It may seem like extra work planning a budget in the beginning, but in the end it helps you worry less about money when you should be focusing on enjoying university or college life.

Entering tertiary education can be a nerve-racking experience, but having your budget prepared can mean one less thing to stress about.

  • Rent
  • Rates (electricity, water, sewerage)
  • Transport related costs (bus/train tickets, fuel, Car Insurance, servicing)
  • Toiletries
  • Food
  • Laptop / writing material
  • Textbooks
  • Clothing
  • Entertainment
  • Internet

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