The Next Level: Budgeting for college

Setting a monthly budget will save you headaches and money in the long-run

Keeping a budgeting diary  can help  students keep track of their finances and identify areas where they can make savings. Photograph: iStockphoto/Getty Images

Keeping a budgeting diary can help students keep track of their finances and identify areas where they can make savings. Photograph: iStockphoto/Getty Images

 

College is a shock to the system - and to the wallet. The majority of students have spent 17 or 18 years in the comfort of the family home. Bills are paid for. There’s no rent. Meals are provided. Someone else buys your school books and pays for your education.

Suddenly third-level begins and expenses start to pile up. Of course, students who stay at home face less pressure than those who have to move out to attend a distant college.

Meanwhile, many mature students will already have experience of running their own home and they will know how to budget, although even they will face a financial hit when they go to college. The rising cost of rent - not to mention the difficulty of finding somewhere to live in the first place - is the single biggest cost students will shell out for.

Erin Hyslop is a 36-year-old mature student who attends University College Cork and has worked part-time as a “money mentor” since 2015, providing support and advice on budgeting to UCC students. She is originally from Tralee and has lived in Cork for the last 16 or 17 years, and she has a teenage daughter.

“I returned to college about four or five years ago, doing a healthcare assistant course through the local education and training board before starting the BSc in occupational science at UCC. When I returned to learning, I had to immediately make changes. I got rid of the car and moved closer to the city to reduce expenses. Regardless of how old you are or what generation you come from, going to college requires sacrifices.”

College is the single biggest outlay parents can expect to ever spend on their children. The costs can be staggering: a student living at home will probably need at least €27,000 over the course of their college experience, while those living away from home will need about €44,000.

Food, rent, bills, books and class materials, clothes, medical expenses, phone bills, social life, student registration charges and other expenses all add up. If a student loan scheme is introduced, this will reduce college costs in the short term, but graduates will end up paying back the costs when they’re more established in their careers.

In her role as a money mentor, Hyslop meets students informally on campus for a coffee and helps them to figure out a budget. “One student who was having financial difficulties was referred to me through the UCC student budgeting advice service.

I sent him a spending diary and budget sheet and asked him to keep track of his spending for just one week. The following week, we met to work out any areas of difficulty he was having. He was being cautious with his spending, but it was hard for him because he had to subsidise his own tuition fee. I advised him that he could get work as a student on campus, and that he could avail of the student assistance fund, and we worked out a way that he could save for the next few years. Campus student assistance funds can be a vital lifeline for students and can help with one-off payments.”

Hyslop is now carrying out research into what motivates changes in spending habits among third-level students, and early results suggest that parents are a huge factor and that students who learn about money management at a younger age will be better at budgeting. The earlier this happens, the more likely students will be able to cope with the cost of college. Don’t bury your hand in the sand. Learn to budget in your first few weeks of college and you’ll save yourself a lot of stress.

Figures from Dr Brian Gormley of DIT’s campus life service show that the cost of living has not risen much in the past year, with one glaring exception: rent. “Rent has increased by over ten per cent in the past year,” he says. “This now exceeds rental costs during the boom and there are only 3,100 available properties for rent, according to Daft.ie.

The Daft report shows that rents have not increased as much for ‘sitting tenants’, so new tenants are paying higher rents; this affects students more than other renters.”

While students are ensnared in the seemingly never-ending housing crisis, Evan Healy, budgetary adviser at UCC, says that he is now seeing less students about financial worries than at the height of the recession. However, he cautions that the rising tide has not lifted all boats. “Some students are in receipt of the grant, they’re trying their best to manage their money and they are still struggling. That said, there has been an increase in the number of part-time jobs available and the Susi student grant system is functioning much better. But students do need to learn to budget and we can help them do this. Our office can also help them access hardship funds or social welfare payments. We advise them to talk to their friends or family members about budgeting.”

What about those students for whom no budget or hardship fund in the whole world would enable them to go to college? “Sit down with someone - whether parent or guardian, spouse or friend - and work out the sums before college starts. If they can’t afford college this year, it might be an idea to work for a year and save some money rather than dropping out because you can’t afford it. The student advisers in all the third-levels are available to speak to students who need support.”

PANEL: Top tips to save money:

- Use your student card for discounts. Many businesses, particularly those near student campuses, will give discounts to students. Also, make sure to collect as many vouchers as you can get, particularly during orientation and freshers weeks - although if you buy something just because you have a voucher, you’re not really saving money.

- If a student has car, carpooling can be a good way to save money. Students, especially where they are sharing a house or an apartment, could go to the supermarket together and pool their food. Buy one get one free deals can be a false economy - chances are that the extra bag of salad will just end up in the bin - but if you and your housemates shop together, and if you plan your meals, these deals can work out well.

- Aldi. Lidl.

- Get a nightsaver energy plan which charges less money for using appliances like washing machines and dishwashers in the evening. It’s always a good idea to move to a new electricity and gas provider every year because there are all sorts of incentives for switching; although students will rarely be in the same house for two years in a row, they should still shop around. Bonkers.ie is a very useful price comparison website.

- Learn to cook a few decent meals. Ten is ideal, but one will do for a start. The fall-back option for students tend to be pasta or noodles, but if you make a big pot of bolognaise or curry, loaded with as much veg as possible, you’ll have the makings of a week’s worth of good dinner. Freeze them in individual portions.

- We all need our coffee (or tea) fix, but students can easily blow €300-400 a year on coffee. Make your own hot drinks at home and fill a flask. You could save enough money to pay for your entire annual mobile phone bill, with enough money left over for a month of socialising.

- Set up a credit union account. Even if you can only manage to save small sums of money here and there, this could become invaluable when you really need it.

- Many colleges provide free GP and counselling services for students. Although the waiting lists can be long, it’s worth going to them if you can.

- Talk. If you’re stressed about cash, go to the student adviser, the chaplain, or the students’ union. They are there to help you. They want to help you. They are paid to help you. They will help you.

Thanks to Erin Hyslop for some of these tips