Unless you're the most frugal and conscientious person in Ireland, the cost of college will come as a shock. Managing money is a skill that some students may have learned at school but, for most, it takes time and practice.
Having no money or stressing about money can be really miserable. In an interview with The Irish Times in 2016, the writer Caitlin Moran described it: "You know how you feel when you only have 4 per cent battery left on your iPhone? That's how it feels like to be poor. You are constantly very anxious that it's going to run out and you are very far away from your charger."
Some readers will be familiar with this feeling; for others, it will be alien. But only the most privileged – and yes, they are among the world’s most privileged – won’t have a single money worry at college.
Help is at hand, however, and students who learn how to budget won’t just find their college experience easier: they’ll also have a useful skill for life.
We asked two experts for advice. Celine Geraghty is the financial administrator with Dublin City University's student support and development (SS&D). Apart from financial advice, SS&D work together providing advice and support in learning, personal and professional development through their various units including careers, INTRA, disability and learning supports, access service, health centre, student learning, chaplaincy, counselling and their central point of contact, the student advice centres.
Managing money
Paul Merriman is an independent financial adviser, owner of Pax Financial Planning and founder of AskPaul.ie.
“One of the most important things you can do in managing money is to develop a good habit of budgeting: writing down your income and expenses, in black and white, makes it more real,” says Geraghty, who has devised seven easy steps to create a budget:
1. Track your income and expenses with a money journal.
2. Determine your income and find out how much you have to spend.
3. Determine your expenses – learn what you are spending and predict your future spending on rent, phone and other costs, as well as budgeting for variable expenses.
4. Categorise income and expenses.
5. Compare your income to your expenses. A household budget should be balanced, meaning that your income should equal or not exceed your expenses. If your expenses are higher than your income, you need to make cuts.
6. Make plans for unexpected or variable expenses.
7. Think 50/30/20. About 50 per cent of your income should go on needs, 30 per cent on wants and 20 per cent on savings. Saving 20 per cent may not always be possible, but it’s a goal worth aiming for as it can be a lifeline if unexpected expenses arise.
Merriman sees the same set of problems when students first have to manage their money:
* Having the urge to borrow money and getting into debt.
* Not paying debt back and, consequently, having a bad credit report which will stay with them for at least five years and could negatively impact future borrowing for business loans, cars, mortgage or other costs.
* Not managing their money correctly over a short period of time – spending all their money within a few days or weeks and having nothing left, depending on whether they are paid weekly or monthly.
* Spending too much money on non-essential things such as coffees and eating out. Learn a few nice packed lunches and bring a flask of coffee and you’ll save a small fortune.
* Linking college life to spending experiences – once out of college you will be forever spending money on things.
What tips do they have to cut costs and stay within budget?
Geraghty says:
* If you and two other students are sharing a house, work together to bulk buy your food.
* Learn how to cook, perhaps taking a night a week each to make the dinner. Even if it’s only boiling an egg or cooking pasta, it’s a start and will save money on eating out. There are plenty of free, online resources for recipes, while some students’ unions also compile cookbooks.
* If you want to buy something, take a breath and wait. Do you need those runners now, or can they wait? You might even find that you don’t want them, after all. If you’ve managed to save that 20 per cent, this is where it might come in handy.
* Always have your student card with you for discounts.
“Budget well in advance – even as early as birth,” Merriman says. “I have clients that are recycling the children’s allowance, from birth, into investment accounts in order to cover third-level education costs. Obviously not everyone is going to be in a position to do so but it’s a great help if you can.”
Geraghty says that budgeting helps you acquire life skills:
* Realise what a budget is: a way to have peace of mind, control of your finances and financial wellbeing. When we budget, we can be flexible, look at where we can save money and where it can go wrong.
* Develop self-awareness and understand your own strengths, weaknesses with financial temptations.
* Set goals: it’s very satisfying when you reach them. It allows you to focus on and become more committed to your budget.
* Having a budget allows you to make informed decisions – you are in control of your money instead of it controlling you.
Geraghty and Merriman point students in difficulty towards the Higher Education Authority’s Student Assistance Fund, which can help with the cost of food, rent, books, travel and medical expenses. Lecturers, welfare officers and student advisers can point you towards sources of support.
“If a student runs into financial difficulty, the Student Assistance Fund can possibly help. Your college’s access service can also assist access students,” says Geraghty. “In providing advice and support to students, part of our job is to try and prevent students from dropping out: if a student asks for help, financial or otherwise, we do whatever is possible to assist them to remain on their university journey.
“There are also some costs that students and their families may need to consider in the weeks before college begins. These include travel and accommodation while staying over in Dublin or other cities looking for accommodation, a deposit for the first month’s rent, deposit for energy providers, possible furniture and kitchenware as well as other household costs, and possible initial university supplies, including a laptop, bag and stationery.”
