Here are stories of four different students and how they manage their money.
Martin is a first year student living at a hostel. His parents are helping him with the costs. This is how he does it...
Martin has come from New Plymouth and is studying full time. He got a room at Weir House, a hall of residence on campus. It’s within walking distance to town as well as university. It is also fully catered. Committing to a hall was a bit tricky because he has to pay by advance instalments. His parents can help out but he has to contribute to the cost. He is going to use his wages and the student loan living costs for this.
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The first hostel payment is due one week before the university trimester begins. The payment is $2945. He contributed $1495 from his summer wages and his parents paid the balance of $1500.
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The second payment is due on 7 May. The amount due is $2945. He is saving each week’s student loan living costs payment of $169 so that by 7 May he has $1356 to contribute towards the instalment. His parents will pay the balance of $1589. Martin plans to get a part time job for about 10 hours per week and use his wages for his personal spending: cellphone, laundry, snacks, going out. His summer savings will also help with these costs.
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The third and fourth payments due in July and September, he will handle in the same way. Martin will be careful to save each week’s student loan payment so that he can contribute as much as possible to each instalment. Each time his parents wlll pay the balance ($1420).
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After the last instalment is paid on 10 September, Martin can still receive the student loan living costs ($169 pw). As he plans to keep his part time job and his wages will pay for his personal costs, he will stop claiming the student loan living costs. This will reduce his student loan debt.
Martin will set up a tertiary account with his bank. He will set up an automatic payment which transfers his student loan payment directly to his parents’ savings account. This makes it easier for them to pay the instalments by the due date.
It also means that only his wages and his summer savings are left in his account for his personal spending.
Susan is very switched on and has a good system in place to manage her money. This is how she does it...
She is a full time student at VUW and is flatting. She claims the full living costs from the Student Loan and has a part time job at a cafe. Her roster changes from week to week so she is never sure how much she will earn. Her wages range from $90 to $160 per week.
Susan has 3 separate accounts at her bank.-a tertiary account, an online saver account and a Ready Saver account.
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Her student loan living costs of $169 pw and her wages are paid into her tertiary account.
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She has an automatic payment for the rent - $155 per week deducted the day after her student loan is paid.
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Susan gets paid her wages on Thursdays. She has to rely on her wages for her flat bills like power and internet, groceries and personal spending.
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She transfers $25 from her wages to her online saver account. This means she has enough money to pay the flat bills each month. When the monthly bills arrive and get divided up between the flatmates, she transfers the money back into her tertiary account and pays the bills.
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If it's a good week and she has earned more than $130 she transfers the extra amount into her Ready Saver account.
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She uses her tertiary account EFT POS card for her shopping and spending. She can't 'overspend' because she's already taken care of the rent, bills and savings.
When she needs to buy extra things like clothes, or get a hair cut, or a birthday present, she uses the money in the Ready Saver account. Because she has her summer job savings in the Ready Saver as well, she will manage to get through the academic year without using an overdraft.
Vicky is in the 3rd year of her architecture degree. She is entitled to a partial student allowance. She finds the academic workload quite high and doesn't want to have part time jobs during the trimesters. This is how she does it:
She lives in a very well organised flat and tries to keep all her spending to a minimum so she can focus on her studio projects.
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She tops up her partial student allowance of $95 per week with $68 from the student loan living costs. She also is entitled to the accommodation benefit of $40, so her total weekly income from Studylink is $208.
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The flat account is $200 per week. This includes rent, share of power, and basic groceries. She pays this by automatic payment from her tertiary account. The balance of $8 goes towards her cellphone. The flat is close to the School of Architecture so she doesn't pay for transport.
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Her summer savings are in her Kiwibank Back up Saver account. She pays herself $40 per week via online bank transfer to her tertiary account. She uses this for extra food. When she needs to get personal toiletries or has a few extra expenses she also uses her summer savings.
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Vicky claims the full $1000 course related costs from the Student Loan to pay for project materials. As she doesn't want to spend this on personal stuff, she gets the money paid into a different bank account at the National Bank. It's not quite enough to cover all the course costs but she works during the mid term break in late June for 2 weeks and those wages go towards the second trimester costs. In this way she manages to stay on top of her academic costs and she avoids overdraft and credit card debt.
Greg is from Wellington City and can therefore live at home while studying at VUW. He has decided he can manage without the help of a Student Loan. This is how he does it:
He has been careful about having a savings plan. Any money he has received for birthdays and Christmas etc he has put into his savings account. He has had a part time job for the past two years which included working full time over the summers and he has saved more than half of his earnings.
Although he’d love to go flatting, he’s done the maths and rather than work to pay rent and bills, he lives at home and just earns enough to cover his personal spending. He buys a 30 day bus pass ($140) to commute from Island Bay, doesn’t spend more than $20 per month on his prepay cell phone, and limits his drinking and nights out.
So far, his savings have been enough to pay for his tuition fees and course books in his first and second year at university. If he’s not able to save enough over summer this year, he will apply for a student loan. He’s happy that, at least until now, he’s avoided that debt.