University, for many students, is not only about learning the course work. For students straight out of high school, it’s also a time when you learn to be an independent adult. A major part of that is money, and how to use it well, when there is not much of it and you are on your own. So here is some tips for students, and for parents, some advice that you can give to your teenager starting college (or already there) and things that you, as the parent, should keep in mind.
Before I get to the actual advice, I would like to state for the record that while some things may appear to be common sense, it is not always as easily done as it is said. This is especially true for people who are only newly on their own, such as university students. Learning to handle money wisely and independently is a little like learning to drive a car: while it often becomes second nature after awhile, it is often difficult at first and some people never really get a good grasp of it especially if they were not taught well in the first place. This is why good advice and instruction from the start is important, although independent practice is also required.
Basic Budgeting for One
The simplest way to survive a student budget is to figure out how much you have and how much is needed for each area of spending. This is important not only to make it easier not to overspend, but it also helps make it a lot easier to notice when something changes unexpectedly.
When helping a student to figure out a budget or figuring out one for yourself after working out how much you are working with, the simplest approach is to categorise spending. For example, Isabelle’s categories might be:
- Groceries (her residential college does not provide food) and study snacks.
- Toiletries, such as shampoo and tooth paste, and other house hold goods such as laundry detergent.
- Text books.
- Rent and university fees.
- Recreation/Study breaks.
- Other things that may need to be replaced now and then, such as clothes, etc.
It is important to note how often each area requires spending, because it can differ greatly between (and within) categories. For example, most people need to buy food and pay rent more often then they need to buy laundry detergent or shampoo and text books are usually only bought once a semester. Other things to keep in mind are:
- The first week when you start university and of each semester (especially if you go home during the holidays) will be more expensive than the rest of the year. This is not only because of bond, university fees and text books, but also because there are certain items that need to be bought at the beginning and last for awhile, such as stationary or longer-lasting food, that may have been used up the semester before or could not be kept over the holiday.
- Some items will last longer with only one person using them or may be shared with a room or flat mate(s).
- How much space is available, especially if you or your son/daughter will be living in a dorm room. It is also important to keep movability and storage in mind if you do not intend to keep paying rent during the holidays, especially if the university is too far away from home to drive. ( Note: some residential colleges increase the fees during the holidays, or do not offer accommodation during the holidays.)
- You can’t always account for everything, so try to budget a buffer just in case.
Not all residential colleges provide food, or only provide certain meals, and not all students live on campus. Even if all meals are included in the rent, you may still need to budget for study snacks (or if you miss a meal time, which could, unavoidably, occur at some stage). Rules that families often use to save money on food sometimes do not hold true for people living by themselves, for example, so here are some things to keep in mind:
- How much space is available, and therefore how much food can be stored. For example, my residential college (which does not provide meals) only provides students with a mini fridge in their dorm room, and a freezer in the kitchen which is shared with 15-20 or more other people. This means that it is often an impossibility for me to cook meals ahead of time or buy bigger value packs and freeze what I can’t eat right away.
- If you do not have much freezer space, it is also important to keep in mind how much you can eat on your own, and how quickly. (It can be a good idea to plan more than one meal or use for food items that only come in bigger packets, so that you can use as much of it as possible before you have to throw it out.)
- If you have assignments or exams coming up, and no space to cook and store meals ahead of time, consider what food you will have the time and energy to cook. I’m not suggesting planning meals this way on a regular basis, but there may be certain times where it is unavoidable so it is important to keep in mind. This is because it is cheaper to plan for it than it is to suddenly find you don’t have time to cook and having to buy pre-prepared food at the last minute. In many countries, fast food can be just as bad for your wallet as it is for your health.
You should also:
- Prepare for emergencies. Accidents can happen to anyone, and sometimes unfortunate events are unavoidable. It is likely that as a young adult on a student budget, you will not have enough money to adequately compensate when something unexpected happens, and that you have not had much experience dealing with or avoiding the sort of situations that can arise. Both students and parents of students should keep in mind that if something goes wrong late in the week, it may not be possible to get to the bank before it closes for the weekend, and even if it is, it often takes several business days for the money to become accessible.
- Avoid paying for the same thing twice, and be careful where you leave things both on campus and in the residential college. Keep in mind that, because students are commonly poor, some find themselves in situations where they can barely afford to eat which can occur even more so at better universities because the cost of rent and tuition is higher. This increases the level of theft that occurs, and keep in mind that living on campus is different to living at home: you can’t possibly know everyone who lives with you, or what their economic state is.
- Make the most of what you have and what is provided for you, including student discounts, and free or inexpensive resources provided on campus or by the residential college. For example, there is often free or inexpensive transport for students (such as shuttle buses or student passes for public transport).
It is also important for a student to take adequate study breaks, and some people enjoy alcohol as part of this. While not drinking at all is a great way to save money, I’m not going to waste your time by simply telling you not to drink. It is most likely that either you (or your son/daughter) either won’t listen or don’t drink much anyway. The other aspects of alcohol are also not relevant to this discussion.
Instead, here are some tips to on how to have adequate study breaks on a student budget, that apply both for those that drink and those that pursue other areas of recreation:
- Budget study breaks around the rest of your expenses, not the other way around. As important as those breaks from study are, it is more important to be able to eat and have somewhere to live. There are many students I know how put drinking and other recreational activities as their first priority and find themselves depending on their friends and other people in order to eat.
- Put money aside during the parts of semester when you don’t have time to take breaks and party, so that you have more to spend once exams are over.
- For those that drink, buy a bulk box of drinks ahead of time, if you have the space to store it (keep in mind there are other complications with this, and some residential colleges have rules against keeping alcohol on their premises) and a reasonable amount of the drinks with you to parties. Alternatively, organise with a group of friends to buy a bulk box together.
- When you have plans to go out, decide ahead of time how much you want or can afford to spend, and take that much in cash with you, instead of your debit or credit card.