Around the country thousands of young Australians are gearing up for their first year at university or TAFE. Embarking on a tertiary education is a significant milestone, and I reckon one of the best decisions a young person can make is to get some post-school qualifications.
Australia is lucky to have a relatively healthy economy, and our overall unemployment rate of 5.1% is low compared to many developed nations. But the latest government figures show 39% of people without a job are aged between 15 and 24.
Without qualifications or experience it’s very easy for young people to become victims of long term unemployment. That’s why taking on tertiary study – be it TAFE or uni, is an investment in yourself that reaps valuable long term rewards.
The trouble is, tertiary qualifications don’t come cheap. University students for instance, are asked to pay for their studies through the Higher Education Contribution Scheme (HECS), and popular Bachelor degrees can cost upwards of $20,000.
This doesn’t take into account other costs like textbooks and equipment. Nor does it include lifestyle inconveniences like sharing a flat with several other uni mates and being fourth in line to the shower each day.
But the investment is worth it. A 2009 report by AMP and research group NATSEM found that over a typical working lifetime, young Australians with a university degree can expect to earn $1.5 million more than their peers who stopped studying after Year 12.
To put that in perspective, graduates from uni have almost double the earning power of those who skip it.
On this basis, education outshines shares or property as an outstanding long term investment.
The downside is that tertiary students often face a few lean years while completing their studies. Many rely on mum and dad for financial support, others scrape by on government benefits and part time jobs.
The financial burden of tertiary study can see uni or TAFE students turn to debt in a bid to make ends meet. Credit cards, student loans and even personal loans may seem to offer a lifeline to young students.
But starting out your working life saddled with high interest debt makes it much harder to get ahead. Graduates who plan to take a trip overseas, save for a first home or just enjoy the freedom of a decent starting salary can find it difficult to achieve these goals if they’re repaying big debts.
That makes it essential to give plenty of thought to how you’ll manage living costs while you’re studying. And it’s an issue that needs to be addressed early in the academic year.
Parents can be a good source of advice on budgeting, or talk to your student union for tips on getting by on a low income. There are plenty of websites like www.understandingmoney.gov.au or ipac’s www.smartmoneyguide.com.au that offer online budget planners.
Getting the money side of student life under control lets young people focus on their education – and that should always be the main game.