A recent survey by Student Village revealed that South Africa’s students may be driving themselves into debt while at university. The survey, which features insight from over 3000 students from universities across the country, found that the top purchases eating into student budgets include indulgences such as alcohol, clothing, jewellery, takeaways, and music.
An alarming 600,000 students were without adequate housing at the beginning of this year. Not being able to afford basic living costs just shows how crucial it is to educate youth on responsible spending habits.
The report reflects that over 86% of students rely on outside sources of income, which includes loans from family and contacts. While over a third of respondents indicated that they funded themselves through full- or part-time jobs. However, the real issue is how these funds are allocated. Crucial expenses such as rent, transportation and education need to take top priority in a student’s budget. Insufficient funds for these essentials could easily lead to unnecessary borrowing and over-indebtedness. This can have a range of serious, long-term consequences.
Many students are unaware of the importance of saving and tend to ‘live in the moment’. Spending money on items based on instant gratification rather than actual needs. However, the rising cost of living means that budgets are stretched to the limit. While the occasional treat can do wonders, students who care about their financial future should save rather than spend.
Here are some pointers for students to set themselves up for financial success:
Cover your basics first
Immediately put aside ample funds to cover essentials such as accommodation, student fees, food and transport on paydays. Doing this ensures that even if you do spend in other areas, it will not affect your key needs.
Save on supplies
Save money on school supplies where possible. Buy or rent used textbooks and sell last semester’s books. Don’t buy books you will only need for a short period of time – check them out from the library instead.
Make the most out of student facilities
Make use of facilities offered to you by your college/university. Look into a campus gym versus a gym outside. Many colleges/universities offer memberships for free or at a reduced rate for students. Don’t buy the most expensive college meal plans. Figure out what you actually consume and get the correlating package. Take advantage of what your campus has to offer in terms of activities, rather than spending money on going out. Many campuses have an array of museums, offer movie nights and other social events for cheaper or, sometimes, for free.
Getting around
Walk, use public transportation or ride a bike instead of having a car.
Roommates
Live with others so you can split rent and utilities.
Savings account
Open a savings account that earns interest. Put money in here every month. It doesn’t need to be a fixed amount, whatever you can afford at the time. You’ll be surprised how much you have saved up after 12 months.
Think twice about that loan
Never take out a loan for anything that’s unrelated to your education. It’s not worth it and you will regret it in the long run. Avoid credit in any form, and rather save up and use cash to make purchases.
Saving helps you build a financially secure future, on which you will be able to build a fruitful and positive life. By following a few basic guidelines and practicing self-discipline, students will be able to safeguard themselves against a financial crisis.