Budgeting

6 Golden Rules For Managing Your Student Budget

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Food, Accommodation, Transport, Health, Entertainment… According to the magazine “Observatoire de la vie √©tudiante”, your average budget is 684.50 $ per month, which doesn’t include the cost of your studies. With an average of only 582 $ direct monthly resources (public aid, parental payments and salaries), you can imagine that you need to manage your spending and find tips and tricks to avoid depriving yourself too much. Student status provides you with various advantages (various reductions, transport, outings, but also various grants and subsidies).

1. Be ORGANIZED!

Whatever the state of your bank account, never play dead with the administration, they will catch you in any case. Give them a notice if you are in a difficult situation, the organisations will find a solution. Pay your rent every month. Your landlord will be forgiving with you for the first delays, then you will receive a reminder notice and another one you will receive a confirmation of receipt. This can go as far as the bailiff’s bill (for which you will pay the costs), where it will be more than time to respond. If you want to be able to pay your bills on time, think well about the direct debit, which will help you to evade a lot of troubles  and appease the landlord!

And here is another invoice. Count on regular correspondence with electricity and gas companies, who will send you a bill every 2 months. To make it easier to be suitable for your budget, you can pay it monthly. If you have financial difficulties, call to postpone or spread out the payment. Negotiation is the key word. You can take advantage of their various rates: base, tempo or peak/off-peak hours. Answer the meter readings, this will help you to avoid unpleasant surprises when you leave.

2. Let the competition work

Internet and telephone are also important determinants in your budget, the mobile phone is often considered your first companion. For the dedicated persons, you can now benefit from very advantageous rates, especially for now with the arrival of new operators who have undercut the prices (provided that you don’t break/lose/get your mobile stolen every 3 months…) If you don’t know how to control your consumption, you have to select the blocked package option. Here again, you have to prioritize automatic withdrawal systems or automatic debit that facilitate the problems that face you in case of not paying, you are often in debit, it is better to send a cheque when you are able to pay.

As per the Internet, you have a wide range of choices. It all depends on what you want in terms of formula and speed (between 15 and 100 megabytes, it’s not the same usage). Operators are managing to match prices and more and more are offering mobile + internet + fixed-line + TV. Consult as many offers as possible in order to obtain a “small market study”.

Of course, this golden rule applies to all your spending items and the Internet is in any case your best ally in this battle! 

3. Make your accounts and avoid going into the red

A table with a column for your expenses and a column for your income can help you to evade a lot of troubles. Update it regularly, every week to see where you are. If you don’t have a lifestyle that suits your income, your account will go into the red, with a negative balance. 

Ask your bank to provide you with an overdraft authorisation in proportion to your income. Competition leads to a certain flexibility towards students, but be careful not to abuse it. This overdraft authorisation (unless specifically negotiated) entails a fee, known as a “premium”, the (annual) rate of which is shown on your account statement. You should therefore divide it by 360 to find out how much it cost you each day. 

Example: you have been overdrafted for 125$ for 7 days at an annual rate of 13%. You will pay : (152×7) / 360 = 0.39$ per day. 

4. Be vigilant, no matter painful it could be

In addition to the granted loans for your studies, the banks are keeping eyes on the students, capitalising on the long term. In this context, they offer specific formulas. Then, if you can think about saving. Favour “available” savings where the money can be released at any time. Then, you may want to consider the Popular savings account, a good solution if you declare your taxes independently of your parents with a net tax rate of 3%. 

Don’t hesitate to consult your banker who will guide you to the most suitable offers. If you wish to take a loan to finance your studies, use the student loan system with all the necessary precautions. And don’t be tempted by the sirens of various consumer loans: you’ll pay an astronomical interest and risk falling into over-indebtedness at the slightest hard blow. 

5. Live in solidarity and consume smart

With a few fateful cooking tips that are aiming the students, you will soon realise that buying fruit, vegetables, white meat and other foods is cheaper than ready meals or fast food. 

The Tupperware mania also has its good side: cooking in larger quantities for lunch or dinner for the next day. 

Living in a shared apartment, taking advantage of solidarity grocery shops, buying in bulk with friends and sharing meals. Wouldn’t solidarity have unsuspected budgetary values?

It is not easy to keep a student budget and the efforts are sometimes exhausting. By following these few rules as best you can, you can avoid getting into serious trouble.

If you have trouble with that at the end of every month, even on a one-off basis, the solidarity grocery shops are a solution for doing your shopping at a lower cost. Help is also available in a number of services: housing, general budgeting, continuing your studies and even a stay abroad as part of your studies. They are granted according to each individual’s situation and require a great deal of administrative follow-up. Each higher education institution is able to help you with these procedures. 

6. Identifying resources

In the case of students whose sources of income are often very limited, they are usually granted pocket money and sometimes a grant or a small salary in the case of students who work during holidays or in parallel with their studies (Student Job). Whatever the source of income is, the student will need to calculate all of them and calculate the amount corresponding to each one in order to add them up and know how much he or she will receive at the end of the month.

Identifying income makes it possible to know one’s financial capacity and to put an appropriate amount to each expense, which reduces the risk of budget slippage.

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Latoya Adams

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