7 Tips That Will Lead To A Financially Successful School Year
College – the most crucial stage in education, simply because it’s the crossroad where students choose their path that will determine their future profession or careers. For Filipinos, education is a priority and a goal that everyone should achieve, because it will in some way or another determine your future success.
However, college education doesn’t come cheap, especially if your preferred school is among the top institutions in the Philippines. Ateneo de Manila alone cost ₱2,794.15 per unit! A full load in one semester will cost you around ₱80,000 to ₱90,000! and in a year that’s ₱160,000 to ₱180,000. That doesn’t even include the miscellaneous and other fees. On the other hand, Polytechnic University of the Philippines cost ₱4,800 per subject for a Bachelor’s Degree, summing up your expenses to about ₱70,000 per semester or ₱140,000 a year! These figures are taken from some of the least expensive colleges in the country!
Despite that, Filipinos still work their best to keep up with the expenses, spending their money for college education down to their last buck. So, it’s also the best time of the year for parents and students to be conscious about their spending!
1) Determine a rough estimate of your monthly expenses
The first step to achieving financial success this school year is to create a budget. Create a spreadsheet for each month of the school year, and list out monthly expenses.
Your budget should include things such as rent, groceries, money for going out with friends, gym membership costs, gas, etc. Creating a budget and sticking to it could mean the difference between financial success and failure for the 2017/2018 school year. Keep in mind you can make modifications to your budget once you have it in place. Nothing is set in stone, but you should try to follow it as closely as possible to ensure success.
2) Use a budgeting tool
Once you have your monthly budget created, avail the assistance of a budgeting tool to help keep yourself on track. There are a variety of budgeting tools available such as Mint, Simple or Budgetpulse, that can help you track your financial behavior,. Use these tools to keep track of how much you are spending and saving, and if you do it well, you will even be able to save up for your financial goals.
All you need to do is to input all your spending, big or small, into the app, and you will be able to monitor your expenses. This makes it easier to notice if you are overspending on a specific category, and where you can cut back on to make up for the overspending.
3) Be ruthless, but practical in cutting your spending
One of the key elements to achieving financial success during the upcoming school year is to understand how your financial picture is different as a student with a limited budget. Since you will not be working as much, you may have to pass on some extracurricular activities such as the following to save money for essentials.
Buy or borrow used textbooks
Let’s face it, the cost of new textbooks is outrageous. Not to mention the fact that they are only used for a few months before you have to buy new books for an upcoming course. In most instance, used textbooks are a fraction of the cost of new text books.
Better yet, if you know someone who are taking the same subject as you but belongs to a different class or schedule, try borrowing their textbook. You could end up savings thousands throughout your college.
Walk or use public transportation
According to Global Petrol Prices, the average cost of gas in the Philippines is ₱43.95 per gallon, and most cars hold anywhere between 12 and 16 gallons of gas. For example, if you have a car that can hold 13 gallons of gas, it will cost roughly ₱571.35 each time you have to fill up. If you have to fill up your gas once per week, you could be spending ₱2,285.40 per month just on gas.
On the other hand, you can get a monthly public transportation ticket in Metro Manila for ₱1,874. In this example, buying the public transportation ticket would save you ₱411.14 per month. Over the course of a year you could save nearly ₱5,000.00! That’s just on gas alone. Other costs like parking fees and tolls, as well as cost of car maintenance, will drive your cost of owning a car even more.
Cook at home
The average cost of a combo meal at a fast food restaurant in the Philippines is ₱164.00. If you eat out two times per day, five days per week, you could spend up to ₱1,640.00 per week just on lunch and dinner.
If you choose to go to a more expensive restaurant for dinner, you can expect to double or triple that amount. Bringing your lunches with you to school, or eating at home has the potential to save you thousands over the course of the school year. Plus, it is also healthier to cook your own meal!
Make your own coffee
The average price of cappuccino in coffee shop in Manila is ₱161.00. If you stop for coffee five days per week, you would spend an estimated ₱805.00 per week just on caffeine. That’s a huge sum of money, don’t you think? For others, that amount is as good as a week’s worth of allowance. So, the next time you make a stop at the nearest Starbucks, contemplate on how brewing your own coffee can provide the same caffeine to your system at a fraction of the price.
Limit your bar visits
It’s no secret that going out to the bar for drinks is far more expensive than having drinks at home with friends. For example, the average cost of one (not bottle) cocktail drink at a downtown club is ₱272.00, a bucket of beer (five bottles) is around ₱300 to ₱500.
On the other hand, the average cost of a .5l domestic beer at the supermarket is ₱45.00 on the average and local brands of hard drinks are just around ₱70 to ₱200 per bottle. If you just buy your drinks from supermarket and have a drinking session at home, you’ll be saving a lot of money!
Drop your gym membership
If you have free access to a gym at your apartment complex or school, consider dropping your costly gym membership. Expatistan.com advises that the average gym membership in Manila costs ₱2,332 per month. Using free access to a gym could save you ₱27,984.00 over the course of a year.
4) Open a good savings account
If you don’t have a savings account yet, make it a priority to open one before school starts. There are many savings account options from a variety of prominent banks in the Philippines. As a student, it will be important for you to open an account with a low initial deposit requirement, low service fees, and a good interest rate.
For instance, you can open a BPI savings account with just ₱500.00 and receive an interest rate of up to 0.50%. A savings account will help you keep track of your money, and help you increase your savings over the school year.
5) Don’t rack up credit card debt
Not many Filipino students have access to credits, but if you do, use it responsibly. Credit cards can add convenience to your life by allowing you to earn rewards and pay for large purchases over an extended period.
However, when credit cards are used inappropriately, your debt may become unmanageable. The most important thing to keep in mind with purchasing on credit is that credit cards are not free money. You are responsible for paying for the purchases you make. Not paying your bills on time will result in your credit score dropping, which will make it difficult to be approved for loans and credit in the future.
6) Don’t miss bill payments
One of the best financial habits you can pick up in your early years is to pay your bills on time, every time. Paying your bills on time will teach you to be a responsible borrower, and will also help you to build your credit portfolio and increase your credit score.
Being late on your credit card payment can incur interest rate of about 3.5% a month. If you have a balance of ₱5,000 in your credit card, and you are only able to pay the minimum payment of 6%, you will be bringing forward your balance of ₱4,700 to the following month. After calculating the interest of 3.5%, the new balance would become ₱4,864.50.
If you don’t clear your credit card debt, and continue to swipe your card for more transactions, your balance would continue to snowball at the rate of 3.5% per month.
If that’s left unmanaged, at the end of the semester, your credit card balance could end up at the same amount as your tuition fees!
Letting your debt get out of control is a surefire way to ruin your finances for the upcoming school year.
7) Pick up a side job
As a student, you may not have a lot of time to get an off-campus job, especially if you are involved in a lot of extra-curricular activities. The Internet provides many opportunities to pick up work from the comfort of your own home.
If you have a valuable skill such as web development, digital marketing, web design, graphic design, or blogging, you could find work on a freelance site such as Upwork.com or Onlinejobs.ph. These side jobs can also build your experience if your studies are related these professions. So, not only will you earn money, but you’ll also gain the experience needed for your soon-to-be profession!
As a freelancer, you essentially run your own business. You are in control of the types of jobs you take, how much you work, how often you work, and the rates you charge. If you
All you have to do to get started is sign up for a free account on those platforms. Set your hourly rate and start searching through the hundreds of jobs that are available on the site. How much you make will depend on how often you work and your experience.
On the other hand, Uber and Grab can be a good source of income for students who have cars. Driving your way to school and home is the perfect opportunity to earn. According to numbeo.com, the average fare for a taxi or Uber ride is ₱150. Imagine how much you would earn if you spare a few hours a day for ride-sharing..
What’s the bottom line?
Think about managing your personal finances the same as you would manage a company’s finances. The success of a business depends on the business owner’s ability to budget effectively. The same is true about your personal finances this school year.
Budgeting doesn’t mean you have to cut out all the fun from your life. It simply means you need to be more selective on what you spend your money on, and look for opportunities to save money in every instance of life. It is possible to be financially successful as a student in the Philippines. It all starts with a little bit of planning, and a lot of personal dedication.