The first few days at college or university are pretty exciting, you get registered, find your home for the next year, bid your parents farewell and you are finally on your own and ready to start a big adventure.
For most students though, this will be the first time they have lived on their own and had to fend for themselves. Cooking and washing often come as a shock, but perhaps the biggest challenge is learning to manage money effectively.
If this is something you are worried about, it is important to plan early.
Here’s how to make sure you don’t run out of money!
What Can You Afford?
The good news is that predicting your cashflow for the next 3 years should be pretty simple. You need to start by figuring out exactly what you have coming in. You can add up what you expect to get from student loans, jobs etc…
Now factor in your living costs and tuition. Your tuition fees are probably set at a certain amount per year, so you can take off that amount easily enough. You should also know what you will be paying in rent (and you can estimate bills if necessary); so take off that amount too.
It is easiest to work with your total income over a year and take off your costs. Then just divide that number by the number of weeks in a year (use 52 unless you intend to work over the summer) to find out what you actually have to live-off each week.
Track Your Spending
Once you know what you can afford to spend in a week, start tracking what you actually spend. This may seem like a pain, but it will help you to keep on top of your finances.
Make a note of everything you spend (except for rent and tuition) and each week work out your total outgoings. You can average your spending over a few weeks and you should easily be able to see whether you are sticking to your budget.
If your spending is regularly going over what you can afford, you obviously need to be more careful (or find some additional income).
Learn To Say No
Some of your friends will seem to have more money than you (and some will just not realise how little they have). In the first few weeks especially, it can be tempting to go out all the time, but that is a sure way to over-spend.
It is important to say no when you can’t afford to go out. Or better yet, suggest staying in and everyone cooking together, followed by drinks and games.
Living in student accommodation can be a lot of fun without the need to go out and spend money and if you are careful you can have a lot of fun on a tight budget.
Running Out Of Money
If you keep a budget, you should be able to tell right away that you are going to be short by the end of term, and if that is the case, take action right away.
You could consider moving to a different (cheaper) accommodation if that is an option. Otherwise though you will either need to spend less money or earn more.
One option is to apply for an overdraft to tide you over, and then you can get a summer job to pay it off and hopefully save some extra money ready for the following year. Alternatively; in your first year especially; there is no reason not to get a part-time job to supplement your loan..
This post was contributed by Rick Peterson who writes for a private tutoring website called Uk Tutors. Rick is a mathematician and a lover of science and education.
Image credit: http://www.flickr.com/photos/44549151@N03/4794592887/