07-52 Living on a shoestring: six tips for new uni students
Monday 5 March 2007
As school leavers across Australia start university and TAFE this week, ASIC has issued financial tips to help students manage their finances.
‘Recent research has shown that close to half of those now at university do not feel financially stable in their current situation. This figure is significantly higher than for the Australian population as a whole’*, ASIC’s Executive Director of Consumer Protection, Mr Greg Tanzer said.
‘With one in five Australians aged between 18 and 24 currently at university, ASIC has responded by issuing the following financial tips for younger students. These tips are relevant to other young adults too, including tertiary students, apprentices, or those starting out in their first job’, Mr Tanzer said.
1 Moving out? Plan ahead
‘This new phase of your life will probably be exciting and a little daunting. You’ll need to consider various costs including rent, a bond, utilities (electricity, gas and phone bills), transport, home contents insurance and possibly large one-off expenses such as a fridge or washing machine. And that’s in addition to food, clothes, health care, education, and, of course, entertainment.’
‘It may seem like an overwhelming list, but by planning ahead, and preparing a budget you can compare the income you have with the expenses you need to meet, and take control of your spending. What’s more, learning to budget is a skill that will benefit you throughout your life’, said Mr Tanzer.
2 Avoid paying bank fees
Do you read your bank statements when you get them, or just shove them into a box under the bed?
‘Check your bank statements regularly, so you know what fees you’re paying. Many financial institutions offer fee-free accounts for full time students, and others allow a set number of free transactions per month. Make sure you investigate the available options, and shop around for an account that suits you the best and costs you the least’, Mr Tanzer said.
3 Save a little when you can
If you get a last minute call to go on a short trip, or join your friends for a big night out, will you have enough spare cash to say yes?
‘Uni is traditionally seen as a time for carefree living and spontaneity, but planning ahead is always vital when it comes to managing your finances. If possible, factor some extra cash into your budget to save for something you want’, Mr Tanzer said.
4 Avoid paying interest
‘You may enjoy the security of having a credit card for unexpected expenses or emergencies, but this is one of the most expensive ways to borrow money.
‘For things you’d like, but don’t really need, try to save up instead of buying on credit. When it comes to the essentials, many universities offer interest free loans of up to $1,500 for students in need, so check what services are available to you’, Mr Tanzer said.
5 Insure yourself
‘If you had a prang, or your laptop was stolen – would you have enough cash to cover the costs involved in putting things right? Unexpected events like this can put a major dent in your financial plans if you're not prepared for them.
‘Taking out home contents insurance and comprehensive car insurance may help to cover your costs if your property is stolen or damaged. Again, shop around to make sure you get the product that suits you best’, Mr Tanzer said.
6 Keep an eye on your super
‘It’s easy to end up with several super accounts if you take on a range of casual jobs while you’re studying. Rolling your super into one account may be a good idea, because it can reduce the fees and charges you have to pay. Before you do, check whether you will be charged a fee for leaving your old fund(s), and whether you will lose any insurance benefits. You should also make sure you provide your tax file number to your super fund, so you don’t miss out on important benefits such as tax concessions or the government co-contribution’, Mr Tanzer said.
Following consultation with university student services bodies, ASIC has developed an online money quiz especially designed for students. Test your financial awareness by completing the quiz at www.fido.gov.au/quiz
FIDO has a dedicated page for young adults which provides a wide variety of savings and investment tips, as well as more information about budgeting, insurance, super and credit. Information is also available by calling the ASIC Infoline on 1300 300 630.
End of release:
*Source: Roy Morgan Research 12 months to March 2006.
FIDO Website: Printed 02/10/2010
