Making Cents: Work out your budget for the college year ahead

Making Cents: Work out your budget for the college year ahead
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There are so many decisions and new experiences facing first-year students in the next few months, it would be easy to become overwhelmed. From where to live, who to live with, what clubs to join. And that’s all before you even get to grips with the academic side and how drastically it differs from school.

Faced with so much, it must be tempting for students to just go with the flow and enjoy each day as it comes. However, while this may work for many aspects of student life, when it comes to your finances, you should really try to have a handle on things from day one.

Unfettered spending early in the academic year could lead to a serious shortfall later on. And the absolute worst time to be dealing with financial stress would be when you are also getting down to the business end of studying and exams.

You may think it takes from the spontaneity of freshers week and your first term away from home, but part of independence is taking responsibility. A recent survey from the Irish League of Credit Unions (ILCU) found the vast majority of students admit to having no monthly budget. Around 57% said they didn’t have a financial plan or a budget to help manage third-level costs. This amounts to sticking your head in the sand and will only hurt you in the long run.

Now is the time to work out exactly where you stand financially, and make any adjustments you need to make your budget work.

First things first, how much money do you have for the college year? Include every source of income, your savings, grant if you are eligible, any financial support from your family, your earnings from any work you have during the year.

Then make a list of your outgoings. Again, be as comprehensive as possible — not just rent, food and travel. If you have to pay separate utility bills at your accommodation, try to figure out what they will be. Don’t forget to factor in an increase in heating costs during the colder months. Include any college-related costs — books, photocopying, field trips. Also include your phone costs and one-off expenses like Christmas and car insurance if applicable. Be realistic about how much you plan to socialise and what that is likely to cost.

When you think you have included everything, check your income against your outgoings. If you have more than enough to cover the year, great.

While it may be worrying if you realise you don’t have enough, it is much better to find our now than gradually realise in a few months time. Knowing now means you can take steps to address the situation. The mechanics of balancing budget are pretty simple; to make it work you need to either cut your spending or increase your income, or both.

Go through your planned outgoings and see is there fat that could be trimmed. Are you planning a social life that would exhaust a Kardashian? Is your food budget based on regularly buying lunch out or getting your food from the local corner shop?

Learning to be thrifty is one thing, going from living in all the comforts of home to living like an ascetic monk is quite another. Be realistic when trying to cut your budget, living on packet noodles for nine months is neither realistic nor healthy. And socialising is part of the college experience and should be included in your budget.

The other area to look at is your income. If you haven’t lined up a job for the college year, is it an option to consider? You have to be careful, The ILCU survey also found six in 10 students say having to work has a negative impact on their studies during busier college times.

Around 55% said they are missing their lectures in favour of paid work, up significantly on 22% in 2017. Given that studying is the primary purpose of college, this is obviously counterproductive. Try to find a job that can be worked around your college hours. If you still have a shortfall, you may have to consider taking out a loan. Next week, I will take an in-depth look at the various student finance options and how to work out the best option for you.

DEAL OF THE WEEK

If a new laptop is on your list of purchases for the new academic year, Currys PC World may be able to offer you a discount.

The retailer is offering extra savings on laptops with an instant trade-in offer, giving customers the chance to save up to an additional €200 on new laptops by trading in their old models.

This offer is available on laptops that are under seven years old, intact and working with no obvious faults.

Customers can get €200 off new laptops over €1,000, €100 against those priced €600 to €999.99 and €50 off all laptops under €599.99.

Currys also give customers the option to spread the cost with finance available in-store although customers should always work out the total cost when considering credit options.

Currys PC World also offers a 90-day trial on all Google Chromebooks, including Acer, HP, Dell, Asus and Google.

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