Thursday, 3 May 2018

3 Tips to Help a Student Manage Their Finances


A window sill with books standing up, with a pair of glasses and desk accessories beside them. It's not easy for students starting out at university to stay in credit and spend wisely, when they are suddenly responsible for rent and bills and getting your money in big chunks every few months requires a lot of forward planning. It would be so easy to become overwhelmed with suddenly having a lot of money in the bank and unlimited access to shops and bars! It's most likely the first time they will have been given a lot of money and it's good for them to have some preparation for how to handle it. So, I've invited Braant Accounting to provide some tips on how to help your child when they head off to pastures new. 



Students and money troubles don’t have to walk hand in hand despite student years being some of the most financially challenging times. If students can learn to budget and manage money effectively, they’ll have a skill for life without graduating burdened by debt. Here are three points you can use to open a discussion when your child is about to go to university and start managing their own finances.

Wise Budgeting


When the budget is limited, you have to watch what you’re spending no matter how boring it might sound. For example:

1. Figure out what you need for the month (or the week if you know monthly budgeting tempts you to overspend), and pop it in an envelope labelled with what it’s earmarked for. Have separate envelopes for everything you regularly spend money on, from food to rent, to entertainment or travel expenses. If you run out of money before you run out of month (or week), you know you either have to cut back or think again about how you divide your funds.

2. Write down everything you spend in a notebook, then keep a running total of your current bank balance. This is a little trickier than simply dividing your available pot into weekly or monthly allowances as it needs some commitment to keep it going. Missing a few transactions will throw out the entire system, and you could end up believing you have more than you actually do. If you like the idea of ‘balancing your books’ so you can delve into the numbers and see where you’re spending most, but are not sure where to start, ask someone who knows about bookkeeping to show you a simple system that tracks your income and spending.

Try to Avoid Credit Cards


A couple of the risks you take with credit card spending, even credit cards specifically designed for students, are the sky high interest rates and their potential to damage your credit score if you miss a payment.

All the best advice says to pay off the balance each month, but in reality many people find this hard if not impossible. Despite tempting reward programmes and cashback offers, if you only pay off the minimum each month credit card debt can hang around for years.

The upside to credit cards is that they can help you establish a credit history, and build up a record of on-time payments. You can do this by arranging to pay a small recurring bill each month through your credit card, and at the same time arrange a direct debit or standing order to pay it off. That way, what you borrow on the card every month is automatically paid so your good credit history builds up. Just make

sure you don’t use the card for random purchases. Be brave and cut it up if you can’t trust yourself.

Ask for Help


Many universities have funds available to students who are going through tough financial times. Don’t be afraid to ask if you qualify for any of their assistance programmes. Maybe through bursaries, grants or hardship funding, these can often help you bridge the gap so you don’t have to take out expensive loans then scramble trying to pay them off.

In helping your student child to live with extremely limited funds you’re providing a learning opportunity for later life, and may even be nurturing a talent for figures that leads to a career in bookkeeping or accountancy!

At the very least getting through the student challenges is a real achievement, and will give you the confidence that your child will manage any financial challenge life throws their way in the future.



SHARE:

10 comments

  1. Great tips! When I was a student I avoided credit cards completely - spending money you don't have seemed dangerous to me. Budgeting was key and using coupons :)

    ReplyDelete
  2. We’d definitely recommend to avoid credit cards and try to use vouchers and NUS cards to take advantage of shop offers x

    ReplyDelete
  3. Having a realistic budget and avoiding credit cards is the way to go. Great tips here.

    ReplyDelete
  4. Great advice here, wish I had read this a few years ago when I was a student. I think asking for help is a good one - not always easy to do though.

    ReplyDelete
  5. Great tips, my son is starting university in September and we are keen to help him budget

    ReplyDelete
  6. Credit cards are so easy to take out now aren't they but are so much harder to pay off! Budgeting is a big thing, see what you've got left to spend on extras

    ReplyDelete
  7. Some really great tips here. I recently finished my degree and was lucky enough to get extra help through a bursary that was specific to my course so it is always worth applying for them.

    ReplyDelete
  8. I was the queen of budgeting as a student :) Working part time helps a lot! And I agree that credit cards,and borrowing money in general, is risky for students x

    ReplyDelete
  9. Great tips. For so many young people suddenly having to manage a budget comes as a huge shock. Schools and parents definitely need to prepare them more.

    ReplyDelete
  10. Great tips. Avoiding credit cards is the biggest advice I would give anyone, not just a student!

    ReplyDelete

© The Parent Game. All rights reserved.
MINIMAL BLOGGER TEMPLATES BY pipdig