Student Finances; Avoiding the Poverty Trap
Paul Palmer
August 02, 2007
Why is we teach our young students so much but never consider helping them to mange their finances, some students are very lucky and receive all types of help, maybe from parents, scholarships or a family member while others borrow their money from the bank using student loans or use credit cards and other means. The banks provide low cost, often interest free student loans throughout the study period and for either a predetermined period after completing the course or alternatively until the student reaches a set salary.
For many this is the largest amount of money they have ever borrowed to date. Often it is the largest amount of money they will borrow until they buy their first house with a mortgage. Once you borrow your student loans and finish school, the debt follows the student and will still be there. It has been estimated that an average student graduates with at least 2 thousand dollars in credit card debt, and ten times thus amount in student loans, and other types of borrowing.
Many students get caught up in the social scene and can not decide which to get, the new pair of Prada glasses they have just seen in the shop window or the new Coach bag they need for their books. Image means a lot more for their image than being able to carry what is required for their course work.
Setting up a budget when you are in school is key. Simple things like; do you know what income is coming in each month to how much you have to pay out? Do you know how much you are spending for food every day and every week? What additional items will you need later in the term. All these things you must take into account when just starting out on your own to ensure that you manage your student finances.
Now, lets say you are going of to a university, you are walking in a freshman and are just so excited to be there. Here is a little tip you can use to make sure all your money doesn't end up gone!
If you have access to a computer spreadsheet get on it, if you do not a regular notepad with do all the same. Setting a budget is not hard the only hard part is sticking to it.
Once you start school and begin to buy all your books and meet new people and become a social butterfly, you will soon see you will not be able to make it past even your first year with out burying yourself neck deep in debt.
The first step would be to calculate how much money is coming in each and every single week or month depending on when you receive your income.
Set aside how much will be for room and board, books and the necessaries , such as food and other essentials. Then create a full list of what you think you will doing every month and write down how much it will cost. Included in your list should be all outgoing expenses.
Next to each item on your list, mark down the importance of each such as a light bill would be more important then a new pair of Gucci sunglasses. This sort of things helps keep all things in realistic perspective.
Also another thing when you are just starting out and budgeting your student finances, remember when opening up a student checking and savings account the bank will make it seem so easy and great. They will offer things such as overdraft protection, maybe rewards on your debt card and even offer you that little piece of plastic that you should be oh so careful with, not that they will explain the potential pitfalls of borrowing.
A credit card when going through your studies can seem like a great thing to have if you are short on cash and ready to go out and mingle. Always remember; do not spend more then you can afford to pay back at the end of the month. A credit card lender would love for you to carry over a remaining balance every month, this is how they are so rich.
Take this into account when planning your student finances and consider all of the areas mentioned above.
If you do get into trouble don't worry, just seek help go and see your bank and explain to them your situation, they are often more understanding than you might think, mind you if you go back to them asking for more every term because you just had to go away at the end of the last term for a treat so you start by paying your debts off with the next grant cheque. You will soon build up such a dept that you will be considering your retirement before you even manage to pay off your student debts. Don't be a fool only spend what you can afford and you will be fine.
Help is available there are part time jobs and other schemes which can help you keep your head above the water, here is one example which doesn't cost anything to start and you can receive a monthly income by spending a little time promoting your own web site on line. Most students have time on their hands but no money to set up on their own so promoting an affiliate program is one option to subsidize that limited budget.
For many this is the largest amount of money they have ever borrowed to date. Often it is the largest amount of money they will borrow until they buy their first house with a mortgage. Once you borrow your student loans and finish school, the debt follows the student and will still be there. It has been estimated that an average student graduates with at least 2 thousand dollars in credit card debt, and ten times thus amount in student loans, and other types of borrowing.
Many students get caught up in the social scene and can not decide which to get, the new pair of Prada glasses they have just seen in the shop window or the new Coach bag they need for their books. Image means a lot more for their image than being able to carry what is required for their course work.
Setting up a budget when you are in school is key. Simple things like; do you know what income is coming in each month to how much you have to pay out? Do you know how much you are spending for food every day and every week? What additional items will you need later in the term. All these things you must take into account when just starting out on your own to ensure that you manage your student finances.
Now, lets say you are going of to a university, you are walking in a freshman and are just so excited to be there. Here is a little tip you can use to make sure all your money doesn't end up gone!
If you have access to a computer spreadsheet get on it, if you do not a regular notepad with do all the same. Setting a budget is not hard the only hard part is sticking to it.
Once you start school and begin to buy all your books and meet new people and become a social butterfly, you will soon see you will not be able to make it past even your first year with out burying yourself neck deep in debt.
The first step would be to calculate how much money is coming in each and every single week or month depending on when you receive your income.
Set aside how much will be for room and board, books and the necessaries , such as food and other essentials. Then create a full list of what you think you will doing every month and write down how much it will cost. Included in your list should be all outgoing expenses.
Next to each item on your list, mark down the importance of each such as a light bill would be more important then a new pair of Gucci sunglasses. This sort of things helps keep all things in realistic perspective.
Also another thing when you are just starting out and budgeting your student finances, remember when opening up a student checking and savings account the bank will make it seem so easy and great. They will offer things such as overdraft protection, maybe rewards on your debt card and even offer you that little piece of plastic that you should be oh so careful with, not that they will explain the potential pitfalls of borrowing.
A credit card when going through your studies can seem like a great thing to have if you are short on cash and ready to go out and mingle. Always remember; do not spend more then you can afford to pay back at the end of the month. A credit card lender would love for you to carry over a remaining balance every month, this is how they are so rich.
Take this into account when planning your student finances and consider all of the areas mentioned above.
If you do get into trouble don't worry, just seek help go and see your bank and explain to them your situation, they are often more understanding than you might think, mind you if you go back to them asking for more every term because you just had to go away at the end of the last term for a treat so you start by paying your debts off with the next grant cheque. You will soon build up such a dept that you will be considering your retirement before you even manage to pay off your student debts. Don't be a fool only spend what you can afford and you will be fine.
Help is available there are part time jobs and other schemes which can help you keep your head above the water, here is one example which doesn't cost anything to start and you can receive a monthly income by spending a little time promoting your own web site on line. Most students have time on their hands but no money to set up on their own so promoting an affiliate program is one option to subsidize that limited budget.
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