Students at North-West University (NWU), just like students everywhere, often struggle to balance their budgets and should learn financial literacy skills early in life, according to financial experts.
Students often struggle to differentiate between essential and non-essential goods, which then leads to reckless spending.
We created an open question on Instagram to invite comments from students on the importance of a student budget. Most students said that budgets are a waste of time because they are hard to manage, especially when they need to split their money between non-essential and essential things.
We also created an Instagram poll to find out what students spend their money on. A total of 80 students participated in the poll. The results are shown in the table below, it shows the percentage of participants who spend their money on each of the different categories. Judging by the poll results, it is clear that students like to spend money on items that are not always essential, such as alcohol and cigarettes (66%), takeout food (79%) and going out (63%). Almost all students who participated in the poll (98%) spend money on groceries, which is an essential purchase.
Letago Nkobo (22), studying towards her bachelor’s degree in law, a student who receives NSFAS funding, said: “I find time to plan my monthly budget, which changes all the time depending on the things I will need for the month, however, I find it hard to stick to it. This is because I spend most of my money on non-essential expenses such as nights out and sometimes having to attend events with friends.”
Reabetswe Moema (21), who is studying towards a BSc honours in environmental science, said, “I do plan what I need to buy for the month, including all the things I need to do, I try to be strict with my budget, but I find myself failing. I end up doing other things with my money, like going out.”
It seems that the challenge for university students is not making a budget, but sticking to it. Students should keep in mind that the basic principle of budgeting is to never to spend more money than they make.
One student who understands the concept of a student budget is Mothusi Mere (29), who is currently studying towards a BCom honours in marketing management.
“I am very disciplined when it comes to my budget and I never exceed it. I spend most of my money on groceries because I only want to stress about my studies, not running out of food. Back when my undergraduate programme was funded by NSFAS, I would receive R1500 per month. I would spend R1000 on food and use R500 as pocket money. On the side, my parents would send me R750 or R1000, so I would use R200 for gym, R250 to cut my hair and the rest would be for leisure. Now that I am no longer on NSFAS, my budget has changed. With the money I get from my parents, I use it strictly for groceries, making sure that I buy a supply of items that would last me six months,” Mere said.
College students spend most of their money on clothing and entertainment, apart from academic and additional college expenses. Students also spend a lot on food when they live away from home. It is common for young college students to simply not be aware of where their money is going.
While in high school, fixed expenses may include a car loan or cell phone bill. A fixed expense is often an important and more expensive expense. Variable expenses are expenses that change. Getting pizza with friends or buying new clothes can be variable expenses.
A college student's budget can be affected by items other than food, housing and transportation. On average, students can expect to spend about $158.98 on clothing and accessories per year, and about $164.38 on furnishings. Electronics are a more significant expense, at an average of $306.41 per year.
Students with fewer money worries perform better in college and are more likely to graduate, while financially stressed students have lower grades and are more likely to drop out.
There are four decisions we can make with our money: save it, spend it, share it or invest it. Understanding these differences is important to managing our money well. Michigan State University Extension takes a closer look at what each of these terms mean and how we can help youth understand them.
Money can be used to buy things that you want, such as toys, games, and candy. It can also be used to buy the things that you need, like food, clothing, and housing. Outside of your individual wants and needs, money has a purpose on a global scale.
Spending habits refer to the patterns and behaviors individuals exhibit when it comes to their expenditure of money. It involves the way people choose to allocate their financial resources and make purchasing decisions.
Though food has consistently dominated teenage spending habits for nearly a decade, clothing now reigns supreme as the biggest purchasing priority for teens.
Among the 41 states with reported data, New York schools led the nation in per-pupil spending in 2021 and 2022, spending $26,571 in 2021 and $27,504 in 2022.
Many college students buy typical school supplies, clothing, shoes, food items, among other things. And while not everyone will choose this moment to invest in a new laptop, tablet, or similar form of consumer electronic, a considerable share do, and these are usually the most costly items on the list.
When you spend money on things that you enjoy and that are important to you, it can help you feel more fulfilled and satisfied with your life. Reach your goals. If you have goals that you want to achieve, spending money on things that will help you achieve those goals can be a wise investment.
Scientific studies tell us that spending money triggers a rush of endorphins and dopamine, the instant gratification creating a momentary feeling of pleasure comparable to a chemical high.
50% for your needs: housing, food, utilities, car payments, health insurance, etc. 30% for your wants: dining out, shopping, events, hobbies, travel, etc. 20% for your savings and debt repayments: credit card payments, regular savings, emergency funds, retirement savings, etc.
Average monthly spending on housing: $2,025 (7% increase)
Housing is by far the largest expense for Americans. Monthly housing expenses in 2022 averaged $2,025, a 7% increase from 2021. Over the course of 2022, Americans spent $24,298 on housing on average.
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