3 Ways to Save your Cash Without Sacrificing your Social Life
We’ve all been there. You’re about to pay for your third flat white this week, and you suddenly remember that little piece of paper sitting on your desk at home – you know, the one that says you were only going to spend $20 this week on non-essential items. You did some online shopping earlier in an effort to avoid working on that assignment that you’ve got coming up. Your textbooks have set you back another hundred dollars, and your due date for rent is edging ever closer.
The budget starts today, you tell yourself, knowing full well that in a week's time you’ll be heading out to dinner with friends and will have to start over... again.
It takes time to learn how to budget effectively, and even longer to learn to stick with it. But not all hope is lost. We caught up with the UC Accounting Association (UCAA) and the UC Student Representative Council (UC SRC) to find out their best tips for students on a budget, after they held a joint event together focusing on ‘How to Adult’. Find out below how to make budgeting work as a student without worrying about giving up your social life.
#1 Don’t spend more than you earn
While this one seems like it should be obvious, according to figures from the Commonwealth Bank, one in three Australians consistently spend more than they earn, resulting in many of us burning through our savings. It can be pretty easy to overspend, especially when you’re working hard to ensure your social life doesn’t suffer as a result of study.
Jeremy Eschler, the President of the UCAA, says that this is the first principle of budgeting:
Make sure that month to month, more money comes in than goes out! It’s important to identify where most of your money goes, what are wants and what are needs.
“Controlling this area of money is the first step and is as simple as targeting areas you know are problems,” he said.
According to Amannda Huot, one of the students present at the event and part of the UC SRC, it can be helpful to make sure you write down everything you spend into a spreadsheet.
“Make sure you have a specific amount in your spending account at the beginning of each month, and put the rest away into a savings account,” Ms Huot says. “You can also separate your cards so that you have an everyday expenses card and a big expenses card.”
#2 Plan for any big expenditures you have coming up
Know that you’ll have a truckload of textbooks to buy at the start of each semester? Spend a few months beforehand saving up to ensure that you have enough to cover these without blowing your budget. In particular, it can help to put away a small amount of each pay specifically for big expenses that you know are on the horizon, and it makes it less noticeable when you do have to pay out.
“It is important to plan an amount you can put away each week to save for expenditure! This way you are not taking large chunks from an individual pay check to buy these things,” Mr Eschler says.
“It also helps here to build a safety net that is always sitting in your account so that large and unexpected transactions don’t hit as hard.
“Track and be on top of what you spend, but also be flexible. All that means is that, for example, if you know you like to buy clothes often, plan for when you’re going to make a purchase and put some money away accordingly.”
#3 Understand the power of interest and use it to your advantage
The main idea here is to understand how your super works, as well as the fees that you pay. This seems like a really time-consuming and difficult task, but by investing time into learning how the tax system and super work now, you’ll ultimately save both time and money in the long run.
“Make sure that if you do have large amounts of savings that you know you won’t use, make your money work for you. Learn to invest in stocks and bonds, but be aware of the risks,” Mr Eschler says.
“Make sure you only ever invest what you are willing to lose,” he says. “At the very least, use a high interest savings account or term deposits to attract better interest return on your savings.”