Thinking about heading to university or other study when school is finished? Watch for the money traps that can change your life.
That’s the advice from financial expert Hanna McQueen writing on the Stuff website. In a cautionary article McQueen warns students like you who may be setting their sights on a degree that there are potentially some very real downsides if you don’t have your eyes open.
McQueen believes for years students have been ‘sleepwalking’ into university and into debt.
Her advice is simple and old school:
- Do some planning. Will the degree/course you are looking at lead to a job that you can get paid reasonably for?
- Be cautious about the old ‘follow your passion’ line. Research the prospects of graduates with your degree. How many get jobs in the field of their passion? Are they getting paid enough to repay their debt? Can you follow your passion as well as getting a rewarding degree?
- Learn what a budget is (money in versus money out). You can meet the difference by tapping into the $228.81 you are allowed to borrow each week, but remember you’re adding $9,152 in debt for one 40-week student year. That’s before you pay for your second and third year fees.
- Understand that banks really, really want to lend you money so be cautious. When you owe them money, you are one of their assets.
The solution – a part-time job
- Part-time work enables you to keep your debt down, and even to consider if working in a job may be better for you than studying.
- Research from the US shows that students working 15 to 20 hours per week have a higher grade point average (GPA) than non-working students. They are forced to prioritise their time and study smarter. Plus a bonus is less time to spend your money.
- Working part-time helps you learn what they call financial literacy – how to manage your money.