Oran A. Hall, Contributor
Most tertiary-level students are at the pre-career, foundation stage of the life cycle and are, quite likely, doing a balancing act to keep afloat financially. Students who are financially literate and practise what they know are in a better position to survive.
They are less stressed financially, are better able to perform academically and experience better mental and physical well-being.
University and college are often the first chance many have for significant independent financial decision making.
Learning and practising sound financial skills can go a far way in building a foundation for life-long financial well-being.
Among the concerns and challenges of students in our tertiary institutions are lack of funds for educational and living expenses, dependence on loans to meet major expenses, dependence on parents and late remittances from parents.
Several students of one of our universities acknowledged a few years ago that they put very little focus on savings, did little comparison shopping, did very little budgeting, spent on parties, practised poor nutrition at examination time, put limited focus on long-term planning and generally used cash to transact business.
A 2004/2005 study, 'College Students and Financial Literacy', in which students from the University of Georgia and the Louisiana State University participated, revealed that parents were the greatest influencers of their financial decision making. Financially fit or not-at-risk students exhibited the following traits: they tracked and budgeted expenses carefully and intentionally avoided impulse buying.
Financially fit or not-at-risk students saved, a habit developed in childhood. They respected money, that is, they saw and understood its value as important. They discriminated between needs and wants.
At-risk groups, on the other hand, reported the following influences on spending decisions: external factors such as advertisements, peers, often the cause of impulse buying, and the thrill of expensive purchases as status symbols.
Keys to financial planning
Students may have much to gain from the following keys to sound financial planning.
Know yourself: know your emotions, priorities and financial position. Have a plan with clear objectives. Control your emotions. Develop the savings habit. Weigh every spending decision
Let your money work: earn even a little interest, as much as you are able to, but eschew greed and risky undertakings.
Make a written budget and stick to it: Do a weekly evaluation of your financial position or more often, if possible. Limit the influence of external influences. Respect money; do not waste it.
Understand what you are doing: Be deliberate; do not rush to make financial decisions. Educate yourself on financial matters and, very importantly, protect your health.
Abundance of information
Most of us are steeped in our old ways and it takes time and effort to change. It is challenging to develop new habits in adulthood.
The failure of parents to teach and model good financial management skills is not an excuse. There is an abundance of information on financial management and it is readily accessible to those who care to have it.
Tertiary education is not cheap. Rental rates are high in the communities that host our tertiary institutions but there are also cheaper options within reach of the institutions.
Hope Tavern, near the University of the West Indies and the University of Technology, for example, is a more affordable option than Mona Heights.
There are vast differences between the communities but students on a shoe-string budget cannot have it both ways. Students unable to afford the required texts must make better use of the library.
Creative ways must be found to prepare low-cost meals that have value to hard-studying students. Perhaps friends should come together more often to share expenses.
Whatever the challenges are and regardless of the shock brought about by their new experience, students know why they have chosen the path of higher education.
Those who keep their eyes on the goal will succeed. Many have done so over the years. It will be over in no time.
Oran A. Hall, a member of the Caribbean Financial Planning Association and principal author of 'The Handbook of Personal Financial Planning' offers free counsel and advice on personal financial firstname.lastname@example.org