The untold truth about handling your finances when you are a student

​The untold truth about handling your finances when you are a student

Opinions expressed in this article are those of the author. Please consult an authorised financial services provider for financial advice

By Ouma Thuso Ngwagwe

The time you spend in a higher education institution is the best time to start building a good credit record, which is very important when you leave university and want to start living your best life. However, all of this can be jeopardised by having bad credit due to the untold truth about money handling that should happen at home before leaving for university.

In order to buy property or purchase a car, requires one to have a good credit record. However, it is easy for many students to get themselves into major debt, which may lead to an issue of affordability when it comes to monthly repayments or being blacklisted even before they start working.

These easy tips will help a student make better choices when it comes to forming a great foundation for money management.

Have a budget

Having a budget plays a crucial role in one's life because this will be your "go to guide" that shows you what you can and cannot afford. It will also keep you honest with your finances because you know in advance if you will have a surplus for spending. You need to list from your monthly allowance that you get from your parents, estimated expenses and you saving if you have. Make it a mission to track your monthly spending and account for every cent spent.

Student credit card

It is not worth it to get a credit card when you are a student. Try and live within your means instead of creating unnecessary debt just because you want to have more money to spend on things you don't need or will not remember in a month's time. Remember, failure to pay your credit on time can lead to a bad credit record.

Clothing account

A student should be cautious when taking a clothing account. If you cannot afford to buy it cash, then leave it. Make it a habit to buy the things you need cash instead of using credit. Clothing accounts are known for charging high interest rates. If you are not careful, you could end up paying a lot of money on interest. Also, failure to make payment on time or paying the account at all, will affect your credit record negatively.

Starting a business

If you want to fund a social life, it should be done with a part-time job, rather than a student credit card or clothing account. Most educational institutions offer jobs that can be done while studying, like tutoring, etc. This option will offer flexibility to juggle between a job and school work. Also, starting something small that can generate some sort of income that can assist you financially and give you the ability to save and have spending money on a monthly basis.

Opening a savings account

Do not be quick to open a bank account without a mini research in terms of the monthly fees that you will be paying. Shop around for free savings account which will not charge you for cash withdrawals. This will save you money in the long run.