Creating a budget when you go away to university is the easy bit – sticking to it is a more difficult challenge altogether.
According to student adviser Lyndon Jackson, there are many traps to watch out for as young people adjust to the responsibility of taking care of their own money. “For some students, it will be the first opportunity to be away from home where they are managing their own financing,” said Mr Jackson, the acting director of the Counselling & Career Centre at Bermuda College. “They’re going to be making all these decisions about how they use their time and how they go about their academics, and they’re also having to figure out how to manage their finances. We know that university can be stressful. You really don’t want to add the whole stress of financing to that plate.”
Mr Jackson, whose team provides financial advice to College students before they fly out to university, said common mistakes include failing to track your spending, living beyond your means and not establishing a routine over spending your money.
Breaking your budget as a student is traumatic enough at the time, but racking up debt can also have consequences later in life, when a poor credit rating harms your chances of buying a house. Mr Jackson shared some top tips to make sure you stay in budget.
Adopt the right mindset
Many Bermudians have a penchant for the expensive things in life. But if you’re on a tight budget, you need to think differently. “As Bermudians, we love things that are brand-based. We tend to go for that expensive one,” Mr Jackson said. “There are certain places you can shop when you think of managing your money. It may not be name-brand stuff, but it’s still of the same quality and will be less expensive.”
You should also take advantage of discounts for groceries, travel and entertainment, and sign up for loyalty cards.
“Bermudians may think, ‘I’m not getting a discount!’ But no, you need to shift that mindset. Discounts are going to help you tremendously. Don’t be too proud. Stretch your dollar or pound and make it go a little further for you.”
Learn to say “no”
“This is a big thing,” Mr Jackson said. “You may see something expensive in the store that you don’t really need. You have to say ‘no’ to buying that. Instead of thinking about what you want, think about what you need.”
This also applies to socialising. “It may be that you’ve spent all you can spend for the week, then Ace Boy or Ace Girl comes along and says, ‘Let’s go out!’ But, if you haven’t got any money, and you can’t go out without going into an overdraft, you have to be able to say no.”
This doesn’t mean you can never go out – just pick your moments more strategically. “You can think about when your opportunities might come along to go out. If you’re forming good relationships, they’ll understand because you’re all in the same boat. It’s just really feeling secure about the decisions you make and remembering how they connect to your ultimate goal and sticking to that.”
If you find it difficult to make mature decisions, try surrounding yourself with people who have clear goals. “That helps you shift your mindset,” Mr Jackson said.
Seek help if you get into difficulty
Universities have support services such as financial aid offices, but not all students take advantage of them. “If you get into difficulties, you need to seek help and be open to the resources that can help you, rather than allowing that hole to get so huge that you’re unable to get out of it,” Mr Jackson said. “Reach out for help as quickly as you can when you feel like you’re going down that rabbit hole. They know how to help people going through hardship.”
Explore your options and seize opportunities
There are many ways of boosting your bank balance while you’re at university. “There are a lot of scholarships out there and often they’re not taken up,” Mr Jackson said. Reduced fees are available in the US via schools that have relationships with Bermuda, while Bermudian students in the UK are eligible for the same kind of funding or loans as British students.
“If a local authority is offering anything, you can apply for it,” he pointed out. “There are a lot of opportunities to establish relationships with these entities to help your finances. Be savvy about what’s out there.”
Student loans are another option, but Mr Jackson said you should always seek a scholarship first. You can also use your time and skills to earn money.
“Young people are good at leveraging their skills. They may have a skill that somebody out there is prepared to pay them for. It could be teaching an instrument, or you could design T-shirts through a social media platform. You could get a part-time job, but you have to be very clear about how that fits into your schedule because you have to manage it through your academics.”
Think long-term
Mr Jackson learnt from personal experience that you need to bear in mind the consequences of your short-term decision-making. “When I was away in the UK, I purchased a stereo. It was the stupidest thing I could have done,” he recalled. “I didn’t pay for it all at once, I paid for it in installments. The stereo cost 100 pounds. At the end of all my payments I ended up paying 800 pounds for that stereo because I didn’t understand how that worked.
“The story gets worse because the stereo was stolen, so I was still paying for it when I didn’t even have it. You have to think long-term. How is this behaviour going to affect things down the line?”
