Understanding your money, and how to use it smartly, is an essential life skill. Empowering yourself with the knowledge to make smart choices and build good financial habits while you’re studying will help you reduce stress, stay focused on your coursework, and feel a little more in control and prepared even when the world around you feels unpredictable and full of challenges.

Work with what you have

As a student, you may feel you have too little money to learn about managing it well. But don’t be fooled. Learning to manage what you have now will benefit you while you study and for the rest of your life. Not only will smart money principles help you to prioritise and stretch your money, but the habits you learn now will prepare you for the future. Evidence suggests that those who can manage a small amount well tend to manage bigger amounts well, too, and are better able to use their money to achieve important goals. Start learning great money habits from the start, and you’ll be ready for success when you begin to earn a salary in the future.

Money and emotions

You might be asking: emotions and money? What do they have to do with each other? Understanding the principles of money isn’t difficult, but consistently doing what you know you should do can be more tricky. Often, this is about how you manage your emotions and the impulses they create. When you feel stressed or tired, you might be tempted to spend on unplanned takeaway food. Or when you feel pressure to impress or fit in with friends, it might suddenly feel essential to buy something you don’t technically need, even if you need to use debt to buy it. Or you may find it difficult to remain clear and firm about what you can and can’t do to help and support family, and what will make things more difficult for you and your family in the longer term, even if it helps resolve a situation now. Whatever the scenarios and feelings are for you, you’ll find that learning how to respond to your emotions may be just as important as any specific money management tool you could use.

Money habits for study success

Here are the most important money habits to help you stay on top of your finances, and to help you successfully achieve your studying goals.

Build a budget A money plan, or budget, gives you clarity about how much money you have and what you plan to spend it on. It’s the best way to make sure you spend your money wisely, and have enough when you need it. Here’s how to get started:
List and add up your monthly income – include any money from an allowance, bursary, job, etc. If you get any of your income in a lump sum (like a bi-annual bursary payout), divide the lump sum by the number of months you will need it to last for, then add that monthly amount to your monthly income.

List your expenses – don’t forget to include your regular monthly expenses (such as transport, data and airtime, food, toiletries, entertainment, etc.) and your irregular expenses (such as textbooks, any hair appointments or perhaps a trip home). If you’re not yet sure what will be a realistic amount to spend on a category, put down your best guess and then adjust your budget as needed based on your actual spending. Include any family support contribution you make as an expense in your budget, and plan for it accordingly.

For irregular expenses like textbooks, work out how much you need to save each month. Include this as a saving in your budget, and set this money aside each month to make sure you have enough money to buy them when you need them.

Track your spending – No matter how small, each expense adds up. Keep tabs on your spending by using your banking app, bank statements and receipts. Review how much you spend regularly to see if you’re on track for the month. At the end of the month, compare your planned spending to your actual spending (you can do this in the ‘actual’ column on the budget planner on the next page). If you find you consistently overspend in one category, you may need to adjust your budget.

TIP Work out how much you have to spend on food and entertainment every day (divide the money you have in your budget for the month by the number of days in the month). If you overspend one day, you know you have less to spend the next day. For instance, you might want to make sure you spend less on weekdays so that you can spend a little more at the weekend. Sticking to a budget doesn’t have to be a painful exercise. Treating yourself from time to time isn’t bad; you just need to be sensible about it.