» Cold heart, huge wallet

» Giving in a crunch

» Drowning in debt?

» Insurance confusion

» Slowing down — what now?

» Finally a rates smile...

» 'Don't cheer rate verdict'

» 'Not out of the woods yet'

» Property — what now?

» Rate sigh of relief

Today, 07 September 2008

» Don't approach your bank

Yesterday, 06 September 2008

» De Villiers 'exclusive'

» Judge slams Zuma protests

» Huge pay hike for Mboweni

» Monty calls it a day

» Let me help - White

It was the best of times; it was the worst of times. Dickens just about summed it up. For me student life was awesome, but man was I poor!

You’re on your own now and there are no parents looking over your shoulder to see what you are spending your (their) money on. University administration, the bookshop, movies, bars, clubs, guys, girls and a hundred others things are vying for the meagre contents of your bank account. The temptation to spend like there’s no tomorrow is huge.

When you were living with your parents it was easy. You never had to make any major decisions about money. Thoughts about the things that kept your parents up at night — the mortgage, bills, rates, taxes, school fees, paying for food, clothes...(this list goes on forever) — hardly ever crossed your mind.

Suddenly you have to handle many of these issues on you your own and it’s hard to know what to do.

If you spend thoughtlessly you will quickly fall into a trap from which you won’t be able to escape until long after the good times are merely a fading memory. However, manage your money well and you’ll be setting yourself up for the good life that graduates live in South Africa and most everywhere else.

The money saving tactics in this article can have a dramatic impact on your current and future finances. Follow as many of them as you can and you won’t have to eat ‘two minute’ noodles for the rest of your life.

Try getting a scholarship

Thoroughly search the internet and apply for as many scholarships as you can find and qualify for.

Don’t be too picky. Remember, this is ‘free’ money and certain conditions that are attached to some scholarships such as the obligation to work at a particular company for a specified time can actually be seen as an advantage. You’re assured of a job after graduation and you’ll gain the all important experience that employers seek from applicants.

Don’t just apply and hope for the best. Study hard and get good grades. However, your academic performance will, for better or worse, not be the only consideration for awarding a scholarship. You have to rise above the competition and that means visiting the institutions or people that award the scholarships.

It won’t hurt to ask what you can do to improve your chances. Absolute objectivity does not exist, so you’ll have a leg up on the competition if you show them the face behind the name. Even if you don’t get the scholarship you’ll have gained invaluable experience, easily translated to hunting for the job university is preparing you for.

Many diverse establishments such as the government, charity organisations, companies and even individuals award scholarships and it’s not only the overachievers who are getting them.

Scholarships are not only available to high school students, but also to students at all levels right up to those sweating for a PhD.

You get all kinds of weird and wonderful scholarships. Some might depend on your devotion to a specific religion while others will be awarded on the basis of athletic performance, study in a particular field or even something crazy like having ‘Papenfus’ as a surname.

Student loans — the best debt you’ll ever make

A huge student loan means you’ll be shackled with debt at the start of your career. Don’t let this stop you from studying further. No matter how long it takes for you to pay off it will be worth it.

By some estimates South Africa has an unemployment rate of close to 40 percent. However, unemployment amongst our graduates is about six percent and falling.

Shop (around) ‘till you drop. Go to all the banks to see what interest rates they offer. It might sound like a lot of work, but comparing various rate offers might save you more than all the other tips in this article combined.

When you shop around it’s vital that you understand what your loan will actually cost you. Multiply the number of instalments you’ll have to pay with the amount of each instalment. Subtract from this the amount that the bank will actually pay out and you’re left with the genuine cost of your student loan.

Ask the bank to help you with the calculation and use this figure when you shop around.

The major banks’ student loans are all quite similar. They loan you what you need at a preferential rate and while you’re studying only the interest on the loan is payable. You’re usually required start repaying once you graduate and over the same length of time that you studied. Banks will grant you a grace period for the capital repayment if you have to complete articles, an internship or community service after you graduate.

You’ll need someone with a permanent, full time job and a good credit record to provide surety for the loan. This person will typically be responsible for paying the interest while you are studying.

Getting a scholarship or a very good interest rate on your student loan will save you a fortune, but there are loads of other ways to spend less and limit the amount you have to borrow while you are studying:

• Textbooks. You don’t need new ones and you’re going to sell them back at the end of the year anyway. Only buy the ones you need. It’s a good idea to wait until your classes start before buying your books as some listed as ‘compulsory’ often turn out to be recommended reading only.

  Also, there will always be a student from a previous year who’ll show up on the first day or so offering their used books at a discounted price.

  If you can, why not borrow books from someone who might not be using them?

• The cost of skipping class. Work out how much you’re paying per class. If you know you’re paying, say, R500 for each lecture you’ll be more likely to drag yourself from your bed when Vineyard Flu is tempting you to stay.

• Set up a study group instead of paying for a tutor.

• Don’t get a credit card if you can avoid it. The advantage of a credit history is less than most people think.

• Live at home if you can.

• Avoid all non-academic debt. Don’t buy the Wii with student loan money or your credit card. If you must have it save until you can pay cash.

• Pay your bills as they arrive so you don’t forget about them or feel you have more money available than you actually do.

• Make a budget. Work out how much money you're getting and what your expenses are.

  Having an entertainment allowance is a great way of sticking to a budget. Decide at the start of the year how much money you can spend each month on things like restaurants, clubs, movies, etc. Don’t go over the budget no matter what.

• Don’t drive a car. Cars are bottomless money pits. Petrol, insurance, maintenance costs, depreciation, license and registration, parking, tipping the car guard...the list goes on forever.

  Live close or on campus, cycle or walk, use public transport or catch a lift with a friend who has a car. Get a scooter. They are cheap, fuel efficient and fun to ride.

• Entertainment. There are always free campus activities, so check the notice boards to see what’s going on. You can support the sports teams, join a club, try out for a play, write for the student paper or attend a free movie screening.

  Look for student discounts. Some restaurants, bars and cinemas offer steep discounts to students.

• Food. Check the paper for specials or good deals on basic foodstuffs. By sharing food with your roommate you’ll get the benefit of buying in bulk.

  Always eat in and bring lunch and snacks from home. Many restaurants have massive portions — don’t be shy to share these amongst friends.

  Avoid buying junk food — it’s expensive not to mention fattening.

• Sex, drugs and rock ‘n roll. Party on, but do it cheaply or, better yet, for free.

  Sex, as you know, is glorious. Keep it safe and free by sticking to the complimentary condoms you’ll find all over campus.

  Quit smoking cigarettes. Let’s say you’re puffing a pack (about R23) a day. That’s R713 per month or R8556 per year up in smoke! If you’re addicted it’s much easier said than done, but even cutting back by half will save you (holy smokes!) R4278 per year.

  Make sure you know about all the beer specials and get your kicks when it's happy hour.

• Talk to your roomie before the year starts. Avoid duplicating expenses and discuss who’ll bring the TV, refrigerator, microwave, lava lamp, etc.

• Go on cheap dates. You could go on a hike and pack a picnic basket, visit the art museum, throw a flat party or dish up a home cooked meal. There are too many options to mention, so be creative and have fun for free!

• Join the on-campus gym. They’re usually free or very cheap.

• Start you own ‘business’. Can you cure a sick computer? Can you teach someone to speak French or play the piano? Do you know your way around a diesel engine?

• See the campus doctor when you’re sick. Their consultations are usually free.

• Talk is cheap. Phoning is expensive, but there are many free communication options including MSN messenger and Skype.

• Bing. You’re familiar with MXit, but have you heard about Bing? Bing is basically MXit on steroids because you can import your MSN, Yahoo, ICQ, AIM or GTalk contacts to your cell phone. This means you can chat with anyone everywhere you go without having access to the internet or thinking about which online community your friends are in. Download it for free at www.bing.im.

• Don’t lend to your friends, but if you have to make sure you write down exactly who owes you what.

• Guard against identity theft. Keep your credit card as well as personal information safe from anyone you don’t know or trust and don’t post it Facebook. Never leave ATM slips behind and only buy from reliable websites.

• Swallow you pride. Ask for help if you need it. If you screwed up don’t make it worse by going even deeper into dept.

Do you have good advice for students on a tight budget? Send it to kleroux@metropolis.co.za and I’ll publish it for all to see.