Managing your finances is important for everyone, whether you’re a new student who has just received a bursary, or a working professional earning a salary. Putting some time and effort into planning and managing your monthly or weekly budget is important to ensure you have enough money for important things like food and transport. It’s also a great habit to get into at an early stage so you can ensure your financial health in the future.
In this post we will discuss how best to manage your personal finances and give some budgeting hints and tips for students who are on bursaries, and for those who have taken out loans or whose families are helping to fund their studies. Even if you’re a young professional just starting to earn a salary, this post will have something useful for you.
Managing your personal finances
Being a university student is a big step in gaining your independence. There is no one chasing you to get to lectures on time or making sure you did your homework and you have to manage your own schedule, make sure you eat properly, and try and get 8 hours of sleep a night. That’s before you’ve even thought about socialising. Part of that independence is also having a monetary allowance. For many of you out there, this may be the first time you are receiving a regular amount of money into your bank account that you have to manage yourself. The same might apply if you’re earning a salary for the first time. It’s a great feeling having that level of responsibility but it can also be quite daunting. There are lots of things to spend your money on – some important and some not so important – and it’s up to you to decide where your cash ends up. Here are a few general tips on how to ensure you can afford the important things and still have something left to treat yourself.
Start by calculating your regular, essential expenses such as rent, transport and food. These are non-negotiable things that you need money for in order to survive and get to varsity or work everyday. If possible, set up an automatic debit for your rent and put money aside at the beginning of the week for transport. Doing your food shop on a weekly basis is not only more economical, it also allows you to calculate what you spend on average and then make allowances for additional items such as toiletries or cleaning supplies. There a few ways you can do this kind of tracking. If you’re familiar with Microsoft Excel, setup a spreadsheet that will calculate your total and average expenses and let you know how much you have left for other things. An alternative for the more the tech savvy readers is to download a budgeting app on your phone, which will do all of the sums for you. There are a number of such apps, such as 22Seven by Old Mutual, so it’s worth doing a bit of research to find one that works for you. This article gives a useful summary of the 5 most popular finance apps.
Once you have budgeted for essential expenses, you will have a sense of how much is left for other things like clothes, airtime and entertainment. Remember that things like airtime are a regular expense but clothes are not, so you probably won’t be spending a consistent amount every month. Budgeting isn’t always an exact science and your spending patterns will differ from month to month. It’s a good idea to have a small ‘contingency’ amount in your budget for unexpected expenses like medicine or a new calculator when you’re old one finally gives up. You should also try your best to have some money left over to treat yourself. Socialising with your friends or going to the movies are important for balance in your life and if you manage your money properly, you are more likely to be able to indulge yourself a bit.
Finally, an important note for students on bursaries. Many bursary providers pay out allowances in lump sums, which can make it even harder to budget. Remember things like textbooks are crucial to your studies and you should never spend your textbook allowance on anything else. If you receive your living allowance in one payment, it is even more important that you create a monthly or weekly budget and stick to it so you don’t find yourself short a month before the end of the semester. Go and chat with someone at your bank and ask if you can open a separate savings account so you don’t have your entire semester’s money sitting in your account. Also remember that your bursary allowance is there so you can invest in yourself, pass your degree, and start earning a salary. It may be tempting to help out friends and family who are in need but ultimately you will be able to help the more if you focus on your studies and make sure you get that dream job with that dream salary.
We hope this article has been useful and that you start implementing some of the tips so you can manage your money better now and get into good financial habits for the future. Happy budgeting!