Welcome to part two of student finances explained!
Part one explained what the New Zealand Government has to offer in terms of financial aid. Most options are not free money. They are required to be payed back, and the can rack up debt pretty quickly.
In part two, I am going to suggest ways for the student considering university to prepared, and even a little ahead in terms of money before they even go to university. I am writing this article addressing the student directly, but it is no means only for them to read. Parents with children considering going to university should read this too.
In short, this article will tell you that avoiding debt at university is about hard work and planning.
1. Realistically, you need to start saving for university when you are in year 11. I know this sounds really early to make a decision about what you are going to do with the rest of your life, but even if you donít end up going to uni, you could use that money for traveling, or buy a car, its a win win situation, even if you change your mind later.
You need roughly $10,000 behind you before you start uni, especially if you are thinking about living in a hall of residence. At the start of the academic year, you are expected to pay about $6000 straight up for your hall. This is NOT covered by any form of government funding, and is how the halls weed out people.
Most people start saving at the beginning of year 13, but this doesn't not leave you much wriggle room.
If you start saving in year eleven, and save about $50 a week, you will have $7,800. Plus some extra hours over couple of summers, you would have your $10,000 to be comfortable. If your parents are willing to contribute, then you will be even better off. This is great, because it allows you to take on a small commitment job, say a few hours a week, and not interfere with your school work. I had a five hour a week job while in high school, and it was enough to earn a little bit of money to spend, and a good amount to save.
If you decide at the beginning of your last year of high school that you want a job to save for uni, even if you already had a job, you would need to ave roughly $200 a week. Now if minimum wage is $15 an hour, you would need to work 14 hours to just make savings, no extra for pocket money. 14 hours would also heavily encroach on school work. Plus all the stress of having to apply for universities, finalize what you want to study, apply for halls, and NCEA Level three, its too much pressure.
So start saving as early as possible. The earlier you start saving the less money you will need to borrow.
For example, a residential hall in 13,000 for the year, roughly. After the upfront payment of 6,000, they want $180 a week for the rest of the year. Now this could be covered by the living costs, which add to your student loan, putting you another 6,000 in debt. Or, if you have saved this money previously, you might not need to take out that extra debt.
If you are lucky enough to qualify for a student allowance (you don't have to pay back) then that could go towards your hall fee. But if you have already saved the next 6,000, or even part of it, then you could save your allowance, and have money saved for the next year.
I was lucky enough to be able to do this. I was able to save my whole hall fee before I went to university. I only spent $20 a week of my allowance, and put the rest away in savings. By the end of the year, I had saved $5,000. This stopped me getting into serious trouble in my second and third years at University.
Do not take the decision to attend university lightly, delay if you have to.
Now, most schools push for their students to attend higher education, but its not for everyone. The best advice i can offer is if you are unsure about what you want to study, or if you even want to go, put it off for a year. There are a few good reasons for this. The first is that if you rush into it with uncertainty about what you want to do, you could end up wasting a year on a degree you donít actually enjoy, or in a place you donít want to be. And what it comes down to is that it wastes all that money and time. Another year on your degree could increase your student loan by another $15,000, give or take a few thousand depending on your course and living arrangements.
Instead, take a year off, work, try some new things, figure out what you want to do. This can serve you well in many ways. You can save extra money, and a considerable amount if you work full time. It can help you decide what you want to do with your life, and you might decide you donít actually want to go to university at all. Either way, taking some time off is, what I think, is the best decision if you are unsure, both in terms of money, and taking a degree, or a different life course that is meaningful to you.
Still want to go to uni? Work full time for a year at minimum wage, you will earn about 25,000. That almost enough to cover a standard three year degree!
Want to do something different with your life? You already have an awesome stash of funds to set you on your way.
3.Think about all the other costs you will come across, and plan for these too!
There are many other little things that need to be brought for university, and all these costs add up very quickly.
For studying alone, you need to think about computers, printers, stationary, text books, etc.
In this day and age, you cant go to university without a computer of your own. All assignments are required to be typed, and many resources are online only.
Stationary and usually come on huge sales in January with back to school sales, but are usually over when university starts back. Make sure to think a head, and shop for your university supplies in advance. Laptops and personal computers usually come on sale in january too, but you can also pick up big bargains for laptops at boxing day sales, and other various ones throughout out the year. Start looking for these bigger ticket items probably half a year before you leave for university.
I was lucky to find a great deal on a laptop four months before I started University. It was a liquidation sale, and I got an amazing bargain! I had been actively looking for laptop a few months before hand though, so patience does pay off.
These are really costly. Try to wait until you have had your first week of classes before buying these. Some classes will only use the text book occasionally. Others you will need to read the whole thing. Most lecturers put a few copies in the library, however these can e in high demand over exam times etc, so you can do with out buying the textbook. If you are going to use your textbook a lot, consider buying second hand. Often university student organizations will hold second book sale, and trade me is always a good place to look too. If you can not avoid buying them brand new, then make sure you look after them well, so that you can sell them on for a good price when you re finished with them.
Then there are items you need for living.
The hall does not give you everything you need Each all varies, but you will probably need your own towels, extra bedding, a wash rack,
Flatting comes with extra costs too.And when it comes to flatting there is a lot. Sometimes you need a whole house worth of belongings. Even in a flat with full furnished bedrooms, you will still need to furnish the bathrooms, kitchens, and probably cleaning supplies, like vacuum cleaners, scrubbing brushes, cloths, tea towels... the list goes on. If your flat is unfurnished, than thats a whole new board game. Bedroom furniture and couches are not cheap either.
This is where parents come in handy, because they have had to buy everything that is in your family home. They will be able to help you figure out what you need. Make a list. See what you can borrow(e.g my mum lent me most of the bedding I used as a student.)
The more of these extra, but necessary costs you can save for, and save money on, then the less debt you will get into. The items listed above are what people generally spend their course fees ($1000 borrowing limit) on.
Beware of these costs early, and save money by getting them on special, and avoid borrowing money to pay for them. You could even ask to get some of these items as birthday or christmas presents.
So that concludes part two of student finances explained. I hope this was helpful in considering how to start saving for university! please feel free to leave a comment if you found this helpful or not, or with questions.