FINANCIAL TIPS

LEARN GOODFINANCIAL HABITS MANAGE YOUR MONEY

writer DIANA CLEMENT // image credit iSTOCK

Managing your own money as a student is a big learning curve. Suddenly you need to pay rent, for food, transport and plenty of other bills. There are some simple steps you can do to take control of your finances to avoid spiralling into excessive debt. Learning good financial habits is not rocket science. Here’s how:

KEEP A SPENDING DIARY

Set yourself up for budgeting with a one-off exercise of listing every single cent you spend for a month. Understanding your spending is the single most important thing you can do for your finances, says Massey University’s Pushpa Wood. Take your diary and analyse the findings. It will show you exactly where your money is going. Unnecessary spending really mounts up. Even a couple of bucks a day on chocolate or chippies adds up to $730 over a year or $2190 over a three-year degree. Debt is easy to rack up and hard to get rid of.

BUDGET AND TRACK WHAT YOU’RE SPENDING

The next step is to allocate your weekly spending money to categories such as rent, food, transport and entertainment. Look at the findings from your spending diary and trim the unnecessary stuff. But don’t forget to include a little “me money” for treats, or you’ll fail. Then every week take a few minutes to add up your spending. This is budgeting. A budget app can help keep track of your spending as you go and tells you when to stop in each category.

BE HONEST WITH YOURSELF

As you track your spending each week ask yourself how much of it was necessary. Even cash-strapped students need to think hard about the difference between needs and wants. Being mindful about every single item you buy will help you live within your means. Is that Big Mac or subscription really a need?

LEARN TO LIVE ON LESS

Don’t just accept group think that being a student is expensive as a reason to justify everything you buy. Even your basic supermarket spend will be a mix of needs and wants. Likewise driving when you could walk, cycle or catch the bus is a want not a need. If you hear yourself making statements such as: “I need a new iPhone”, “I need takeaways” or “I need new shoes”, then you could end up in a whole lot of unnecessary debt. Don’t buy new or don’t buy at all. The most important thing you can do to live within your means is to choose to.

MAKE MONEY

Work. It brings in money and you will gain life and work skills to add to your CV. There are jobs out there and someone gets them. Why not you? There’s no reason why you can’t be promoted in your part-time or holiday job and earn more. Or start a part-time business. It could be anything from computer repair to running entertainment events. Employing fellow students to do the work and taking a cut of every hour they work is very entrepreneurial. Finally, you can do it. Don’t assume that all students struggle financially. Plenty are in control of their money. Some may earn more money than you or be given more by their parents. If you’ve used your time while completing tertiary study or training to learn how to manage your money well, you’ll most likely end up better off than many of them in a decade or two.

For more information and help with planning your financial future, visit www.sorted.org.nz