For many Australians the next few weeks will involve settling back into the normal work routine. But for thousands of young people the coming months will bring a whole new lifestyle as a tertiary student. It can be a tough time financially, but embarking on further study is a great investment in your future wealth – and in the long run it can pay dividends.
For some school leavers the decision to attend university or TAFE is not easy. After 13 years at school the prospect of spending more time in the classroom simply isn’t always appealing. For others it will be a financial challenge to get through a TAFE or university course.
The thing is, education pays off – especially in terms of future earnings, and that makes it one of the best investments around.
As a guide, a 2012 study by AMP/NATSEM found a person with a Bachelor Degree can earn around $2.9 million over their working life. That’s almost 1.7 times the lifetime income of around $1.74 million that someone with Year 11 qualifications or below is likely to earn over the same period.
Of course, university is not for everyone, and gaining vocational education and training (VET) qualifications is also sensible investment in your skill set.
The downside to studying at either TAFE or uni tends to be the reality of living on a low income – at least until you’ve graduated. Taking a disciplined approach to your finances can help you get by when cash is tight.
A good starting point is to tap into any perks available to you. Many financial institutions offer low or fee free everyday accounts for students. Take advantage of these to minimise bank charges that can eat into low incomes.
Make use of student concession cards that can help you save on travel, entertainment and other living costs. Your uni or TAFE can provide more information about what’s available to you and how to apply.
Whether you work part time while studying or rely entirely on government support like Youth Allowance, it makes sense to budget carefully.
The government’s MoneySmart website (www.moneysmart.gov.au) features an online budget planner that makes it easy to keep control of your money. If you have a smart phone, take a look at the TrackMySpend app, which can be handy for keeping tabs on spending.
If you find you’re really strapped for cash speak to your TAFE or uni about a student loan. Some of the larger banks offer personal loans and credit cards pitched at students but I recommend considering these as a last resort. If it comes down to a choice of giving up your studiers or taking out a loan to fund the cost, I certainly recommend completing your education. But you need to think carefully about how you will manage the repayments once you are in the workforce.
For more ideas on making the most of your money take a look at my website www.paulsmoney.com.au.