Unless you are the most frugal and conscientious person in Ireland, the cost of a college education will be a shock. Money management is a skill that some students may have learned in school, but for the most part it takes time and practice.
Not having money or being stressed over money can be really miserable. In an interview with The Irish Times in 2016, writer Caitlin Moran described it: âYou know what it feels like when you only have 4% battery left on your iPhone? This is how it feels to be poor. You are constantly very afraid that it will run out and you are very far from your charger.
Some readers will be familiar with this sentiment; for others, it will be foreign. But only the most privileged – and yes, they are among the most privileged in the world – will not have a single worry about money in college.
Help is at hand, however, and students learning to budget won’t only find their college experience easier – they’ll also have a life-useful skill.
We sought advice from two experts. CÃ©line Geraghty is the Financial Administrator for Student Support and Development at Dublin City University (SS&D). Besides financial advice, SS&D works together providing advice and support in learning, personal and professional development across their different units, including careers, INTRA, disability and learning aids, access service, health center, student learning, chaplaincy, council and their central point of contact, student support centers.
Paul Merriman is an independent financial advisor, owner of Pax Financial Planning and founder of AskPaul.ie.
âOne of the most important things you can do in money management is to develop a good budgeting habit: writing down your income and expenses, in black and white, makes them more real,â says Geraghty, who designed seven easy steps to create a budget:
1. Track your income and expenses with a financial journal.
2. Figure out your income and find out how much you have to spend.
3. Determine your expenses – learn what you are spending and plan your future expenses for rent, phone and other expenses, as well as budgeting for variable expenses.
4. Categorize income and expenses.
5. Compare your income to your expenses. The budget of a household must be balanced, that is to say that your income must be equal or not to your expenses. If your expenses are greater than your income, you must make cuts.
6. Make plans for unforeseen or variable expenses.
7. Think 50/30/20. About 50% of your income should be spent on needs, 30% on wants, and 20% on savings. Saving 20% ââmay not always be possible, but it’s a goal worth striving for as it can be a lifeline if unforeseen expenses arise.
Merriman sees the same set of problems when students first have to manage their money:
* Wanting to borrow money and get into debt.
* Fail to repay debt and as a result have bad credit that will stay with them for at least five years and could negatively impact future borrowing for business loans, cars, mortgages or others costs.
* Not managing your money well over a short period of time – spending all your money in a few days or weeks and having nothing left, depending on whether it is paid weekly or monthly.
* Spending too much money on non-essential things like coffee shops and dining out. Learn some great packed lunches and bring a bottle of coffee and you’ll save a small fortune.
* Link college life to spending experiences – once you graduate from college you will still be spending money on things.
What tips do they have for cutting costs and staying on budget?
* If you and two other students share a house, work together to buy your food in bulk.
* Learn to cook, perhaps taking one evening a week each to cook dinner. Even if it’s just boiling an egg or cooking pasta, it’s a start and you’ll save money by eating out. There are many free online resources for recipes, while some student unions also compile cookbooks.
* If you want to buy something, just breathe and wait. Do you need these runners now or can they wait? You might even find that you don’t want it after all. If you’ve managed to save that 20 percent, this is where it might come in handy.
* Always have your student card with you to benefit from discounts.
âBudget well in advance – even from birth,â says Merriman. âI have clients who recycle family allowances from birth on to investment accounts to cover the costs of higher education. Obviously, not everyone will be able to do this, but it’s a big help if you can.
Geraghty says budgeting helps you learn life skills:
* Realize what a budget is: a way to have peace of mind, in control of your finances and your financial well-being. When we budget we can be flexible, see where we can save money and where it can go wrong.
* Develop self-awareness and understand your own strengths, weaknesses and financial temptations.
* Set Goals: It is very satisfying when you reach them. This allows you to focus on your budget and commit to it more.
* Having a budget allows you to make informed decisions – you control your money instead of controlling yourself.
Geraghty and Merriman refer struggling students to the Higher Education Authority’s Student Aid Fund, which can help cover the costs of food, rent, books, travel and medical bills. Teachers, social workers and student counselors can direct you to sources of help.
âIf a student is having financial difficulties, the Student Assistance Fund can potentially help. Your college access service can also help students access, âsays Geraghty. âIn providing advice and support to students, part of our job is to try to prevent students from dropping out: if a student asks for help, financial or otherwise, we do everything we can to help them. continue his university career.
âThere are also some costs that students and their families may need to consider in the weeks leading up to college start. These include travel and accommodation when staying in Dublin or other cities in search of accommodation, a deposit for the first month’s rent, a deposit for energy suppliers , any furniture and kitchen utensils and other household expenses, and any initial university supplies, including a laptop, bag and stationery.