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Dublin: 13 °C Tuesday 23 October, 2018
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Budgeting is boring? A guide to why - and how - you need to master the purse strings

A third-level student will need at least €11,000 to get through the college year, living away from home.

Image: Shutterstock/ajlatan

This article is part of our Change Generation project, supported by KBC. To read more click here.

OF ALL THE challenges facing people moving out of home for the first time, managing finances is probably the most difficult.

It’s worth knowing that for third-level students for example, a DIT guide shows they will need €11,001 to get through the college year away from home. That is a monthly budget of €1,222, but if you’re in Dublin that figure is probably going to be higher because rents are more expensive.

Moving out of home is exciting and it can be tempting to splurge on fun things, especially at the beginning. So, to avoid running into instant cash-flow issues, it is important to budget from the off.

Why budget?

There are benefits to budgeting:

  • You will know where your money is going and whether you are overspending
  • You will have peace of mind and a sense of control
  • It will help you avoid debt, prepare for emergencies and save

Michael Culloty, from the Money Advice & Budgeting Service, told TheJournal.ie that keeping tabs on spending is essential.

“Probably Mum and Dad have been dealing with the finances up to now and they haven’t had to fend from themselves. Now, there are things like gas and electricity bills that come into play, so it’s very important that they sit down and see what resources they have – what will be the income and the outgoings. They’re going to need something for a social life as well and all these things should be worked out in advance.”

Speaking to TheJournal.ie, budgetary adviser at UCC Evan Healy said it’s also important that college students, apprentices and those undergoing other forms of training make sure they find out about any hidden costs related to their courses that they may not have thought of.

shutterstock_181244480 You might have had a lab coat with your Junior Science Kit but you're probably going to have to shell out for a new one... Source: Shutterstock/CroMary

“There may be course costs that they were unaware of – fieldtrips (some students may be eligible for these costs to be covered from SUSI), manuals, lab equipment, clothing costs, immunisation costs etc. It is a good idea for students to speak with course lecturers and students who are currently studying the course to get an insight into the course and any potential ‘hidden’ costs.”

Budgeting tools

Thankfully, the internet has lots of tools to help you budget. Here are a few:

  • Budget planner from the Competition and Consumer Protection Commissioner. Work out a plan that suits you and helps you control your spending.
  • Money management app MoneyWise (on Android).
  • Create budgets and get updates on whether you’re over (or under!) spending, as well as tips for saving money using an app like MoneyWiz.

Dealing with debt

Anyone struggling to make ends meet after moving out of home for the first time may be tempted by offers of credit cards and overdrafts, but the advice from Michael Culloty of MABS is to, “think long and hard before committing to borrowings and take advice from parents or from ourselves here at MABS”.

People in financial trouble should also visit citizensinformation.ie to see what entitlements they may be eligible for, especially if they come from low-income families.

Culloty says the best sources of advice are often those who have gone through it all before. College students for example, should “talk to others who have been around the houses already: join the Students Union and get advice from them,” he says.

Budgeting tips

Here are some tips to help you get the most bang for your buck.

shutterstock_406107340 Er, not that kind of household kitty.... Source: Shutterstock/Helen Sushitskaya

  • Keep a spending diary. After a few weeks you will see where money is being wasted.
  • If you’re house-sharing, kickstart a household kitty for the essentials and utility bills. It means there will always be milk in the fridge, the electricity won’t be shut off unexpectedly and you will never (hopefully!) be caught-out with no toilet paper.
  • If you’re studying, be the first person into the library to get your hands on the books needed for your course. Failing that, pick as many up as possible second-hand.
  • Once you get your college ID, use it everywhere to get as many discounts as you can.
  • Get cooking. Master a few recipes and buy own-brand products in the big shops. Instead of splashing out every lunchtime, try to bring a packed lunch.
  • Get a travel card. Public transport fares are cheaper with a Leap Card for all adu and for students, the Student Leap Card also qualifies you for discounts at some retailers.
  • Shop around for the best deals on electricity, heating, mobile phone plans etc. The Power of One website has energy-saving tips too, while Bonkers.ie helps find the most cost effective utility plans.
  • Do you own a car? How essential is it? If you can survive without it, do. Trade it in for a bike and say goodbye to insurance, tax, car-loan repayments and fuel costs.

4/9/2014 Going To Work Do you really need a car or can public or other transport get you where you need to go? Source: Sam Boal/Photocall Ireland

  • If you have a disability you may be eligible for particular funds. Check with the college disability support service and information is available from the student finance website.
  • Set yourself a strict budget for socialising. Try to avoid using your debit/credit card to pay for drinks at the bar. If you have a limited amount of cash in your pocket, you’re done when it’s gone.
  • Get a part-time job. For some students with 40 hours of classes a week this may not be possible, but if you can make some time to have a job without impacting negatively on your course work, then this may be a good way to boost your income. You should wait until you have your college timetable before committing to work though.
  • Seek advice. If you’re running into financial difficulty don’t ignore it. If you’re in college the support staff are there to help. There’s also organisations like MABS and Citizens’ Information who can help.

This article has been amended to reflect the fact that the Mint budgeting app is not available in Ireland.

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