Making cents of student budgeting

By David Shields

Pic by: Jessica Pike

Kirstin Kyle modelling a hat from Nearly New


University life is full of adventure. It’s a time to party, make friends, discover yourself and, above all, study for a degree. It’s the chapter where responsibility is minimal and finances are non-essential. As students, many of us live hassle-free. In residence, meals are provided and clean linen is supplied every week. In digs, students might not have it as easy, but many say that the sense of independence is worth far more than a ready-cooked meal. Nonetheless, every student is taken care of in some way. The problem with this is that students hardly take time out to access their financial status. With a bit of saving here and there, a world of possibilities awaits them.

Let’s say your expense list consists of late-night two minute noodles, a cup of rooibos in the morning and some toiletries every other week. The question is, where does your money go every month? Perhaps it is time to draw up the ever important, wonderfully exciting budget list. Yes, the one you have been putting off for ages because you’re afraid to see where your money actually goes.

The easiest way to do this would be to write down what is spent as soon as it leaves your pocket. At the end of the month, take the list and see what has been purchased. Categorise these items as best you can. The next time you receive money, try to set a limit to what you spend in each category. By sticking to this limit, the month will be over without you having to stress about that entrance fee into Friars.

An important aspect of budgeting is allowing yourself the opportunity to save some moola at the end of each month. Imagine going on vac in December with some friends, or purchasing that sleek coat you’ve always wanted for this winter. Perhaps saving to invest will sound more appetising. However you choose to spend your earnings, a savings plan knows no boundaries. The nice folk at Activate have compiled a great list of saving plans for your enlightenment.

ABSA – The ABSA TargetSave account is the contractual, disciplined savings account that makes it easier for you to save a certain amount of money every month, for at least six months. In this way, you can build up a good balance, at a 5.75% interest rate, to save for those important life objectives. A minimum opening balance of R100 is required to open the account.

FNB – The 32-Day Interest Plus Account is an investment that gives you access to all or part of your funds within a 32 day notice period. The interest rate increases automatically after 32 days, and again after 64 days. A minimum balance of R100 is required, with a the benefits of a 3.80% interest rate.

Standard Bank – PureSave is a single purpose saving account that pays excellent interest on the smallest balance. It is ideal for start-up or irregular savers who want a separate savings pocket to partner their current Standard Bank account or E-Plan account. Funds are available on demand and you can deposit any amount at any time. Interest is paid on a tiered basis, meaning that the interest rate steps up as the account balance increases. So the more you save, the more you earn. Note that there is a nominal charge on all deposits. A minimum balance of R50 is required, with a 4% interest rate.

Of course, the gap between an ideal budget and reality exists. For most first year students, this is the first time they have ever been restricted to a set amount of money to spend every month. The transition from having mummy and daddy give in to every whim, accompanied by the unlimited spending that comes with a varsity lifestyle, seems to be more challenging than it appears for virgin budgeters. Mariska Thoreson, a first year BSc student, is one of many first year students who do not have a set budget plan. “I don’t need one,” she says, “I know my parents will just give me more money when I need it.” Another first year student, Eneto Malungane, also studying towards a BSc, admits that he too has no set budget plan. “It’s hard to stick to a budget from month to month,” he says.

In empty-pocketed hindsight, it’s hard to establish where your money actually went. So, do first-year students have an idea of what they spend their cash on? “Mostly on food and drinks, some essential products such as toiletries and clothing,” says Grant Penny, a first year BCom student. Skye Atkinson, a first year law student, says that she spends most of her money on take-aways, presents, pretty things and bags. Naturally, the consequences of not having a proper budget only hit home after the ATM spits nothing but your card back and you are forced to admit that you are broke. Even though the first years only arrived about 4 months ago, Natalia Carvalho, a first year BJourn student, painfully admits that she has been broke not once, but twice. “You have that ‘Oh sh*t’ moment when you realise all your money is gone and you don’t even know where it went,” she explains.

So what do you do when you are broke and the Kaif is calling your name?

Step 1: Check whether you have enough money to call your a) mother, if you’re a guy, b) daddy, if you’re a girl.

Step 2: You probably don’t have any airtime, so send mum or dad a ‘please call me’.

Step 3: Wait for them to call you. This will take approximately 0.5 seconds.

Step 4: It is likely that they have not heard from you in a while so answer all their questions like, “Do you still have clean socks?”, very politely. (This step is essential in order to ensure the smooth transition to your next move.)

Step 5: Mention how much you miss them and then quickly add that it’s been hard adjusting to being a Rhodent and that you might have overspent a little.

Step 6: Thank them for the fact that they are on their way to deposit money into your account, and tell them that you love them in your sweetest Michael Jackson inspired voice. Disclaimer: This will only be effective during your first year of study.

In all seriousness, however, university life has the potential for being the perfect budget training ground. By calling your parents every time you’re financially wounded, you are not going to get the most out of the experience. Having a budget while studying away from home sets you up towards having an effective strategy for budgeting once you are actually working, and simply cannot rely on your parents to pay your bills.

By dealing with small amounts of money, like a set month-to-month varsity budget, you will learn to strategise financially – a life skill we are all going to need at some stage. The ability to save some money, as we have seen, is also a great added benefit of budgeting. Financial guru, Suzy Orman, says it is possible to be a millionaire by the age of 45 when you save just R100 a month on the right savings plan. Now, isn’t that worth sacrificing a late-night pizza?

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