Ways to make money go further as a first-year student and as a first-time employee.
There is a certain euphoria about transitioning from high school to university and from university to the workplace. Whenever you hear stories about university or receive advice from those who’ve travelled down that route, it’s usually about remembering why you’re there, exploring and having fun, honouring deadlines, being aware of your mental health, and so on. The same goes for starting out in the workplace. Emphasis is placed on having good rapport with your colleagues, the joys of being independent and having the freedom to do as you wish; hell, just having a job is held at high regard. However, in both these instances, not much is said about how to manage your finances.
The truth is, people are uncomfortable discussing money and secondly, people only take financial tips from people who look like they know all there is to know about money – which is often a misconception. Money is simple, take care of it and it will take care of you. As soon as you get to university, before the academic commitments and the partying, there are a few things you need to sort out in order to lay a solid foundation:
- The first and most important rule – you are not home, so things are going to be different. Because you are still getting financial support from your parents, it’s crucial that you understand your family’s financial standing; there are certain things that your peers might be able to afford that you won’t, and vice versa. Therefore, it’s important to have a fixed budget. Takeaways are a waste of money; quick maths, you buy a meal that costs about R50 just for lunch whereas you could get a vegetable combo for the same amount. Long-term satisfaction over temporary satisfaction. If you’re used to popular quality brands, you might have to buy no-name brands. They’re not all that bad but you’ll soon learn your negotiables and non-negotiables. Don’t fret, it’s just for a few years.
- Understand the conditions of your bursary or student loan – what does it pay for? Based on its conditions, will you need extra cash from home or not? For example, your pass rate has to be at a certain level, otherwise you pay a fraction of the sponsorship; the sponsor gives you a lump sum of the money you need, which means you have to spread it out evenly for the year so that it covers your needs.
- Find a part-time job or join a student organisation – but pace yourself. It’s advisable that you only do this once you’ve understood the scope of your work because you don’t want to burnout. Some student organisations give incentives for your work/time, so choose one that you like. These also help you grasp university culture much quicker and also play a significant role in teaching you important life skills which will come in handy at a later stage. If you can’t join a student organisation, try waitressing, retail, promotions (social media or field), or working at the library. These are flexible jobs that give you time for your academics while you secure the bag.
Independence is liberating but it is extremely challenging and requires a great deal of responsibility. It’s a sink or swim situation because, if you’re unlucky, no one is going to save you. Here are a few healthy tips on how to be financially savvy:
- Have a budget – it’s cliché but it’s true. You’ve moved out of your parent’s house, you need to know how much you will be paying for food (this excludes take-aways because taking a lunch box is more cost effective), transport, emergencies and reserve a little for a pair of shoes – you still need to look good. Financial planner at My Advizar – an authorised financial service provider under the FAIS Act – Khotso Ramphele, says when it comes to budgeting you should follow the 50, 20, 30 rule. “Stick to a standard of 50% which is for your needs such as living expenses; 30% is for the nice life – outings, shopping and other wants and 20% is split into fractions of 15% for retirement and 5% for savings”, Ramphele says.
- Save! Save! Save! Clichés are what they are because they are true. You don’t have to save a chunk of your money. Start with the littlest you can afford and add more when you can. According to Ramphele, “one of the things people aren’t taught is about emergency funds. It will help build six months-worth of emergency expenses fund. You sacrifice certain wants from the 30% and save some from your 5%”. He says this can also be done in the form of debit orders.
Another aspect that’s underrated is joining a stokvel. Don’t focus only on money stokvels. There are also stokvels that include (but are not limited to) groceries, emergencies and furniture. Also, find out what saving options your bank has, those also help.
- Lastly, investments are a great way of saving and making money. Ramphele advises that as someone who has recently started working, it’s important to establish whether you are earning your salary on a clean slate or if you have debt. He adds that you should also understand your salary, as well as the packages that the company you work for offers, before looking into external investments.
Ramphele says, “the first thing you want to do is insure your income against disability, against severe illness and other unforeseen life experiences”. He says these are forms of investments too, because they take care of you if there is no more work. He also adds that with retirement and saving packages, it’s all about finding a vehicle that best accommodates you and your needs. Do some research (especially the terms and conditions) and compare what different companies have to offer to make an informed choice. Pace yourself and be patient. Some months will be better than others but try to be as disciplined as you can – no excuses.