How to choose the right credit card as a student
1. How much do you earn?
The best place to start, is by knowing how much money you earn each week after tax and other deductions. Make sure this is accurate by understanding what your regular salary is before any variances (like overtime) and you’ll have how much money you’re starting with.
2. How much are you spending?
Next, add up all of your outgoings. Make sure to factor in everything that you pay each month. These will likely be fixed expenses such as a mortgage or car repayments, and then look at your variable expenses such as electricity, petrol or public transport costs for getting to work and food that you’ll likely pay each week.
3. Split your outgoings into mandatory and lifestyle
Then it’s time to identify the difference between mandatory outgoings (think rent or your phone bill) and your general lifestyle expenses. These could include clothes purchased, your daily morning coffee or even movie date-night once a month.. Add these up (and make sure to round up!) so that you’ve got a good idea of all of your spending habits. A look back through the transactions on your everyday spending account is a good way to see where you’re spending your money and those forgotten direct debits too.
4. Remove your outgoings from your income, and look for ways to cut spending
To understand how much you can budget, remove the totals for your outgoings from your earnings. Ideally, your outgoings are less than 80% of your earnings, so that you have opportunity to set money aside in savings.
If your expenses are more than 80%, now’s the time to make cutbacks. You’ll have all of your costs in front of you, so start taking a look at things you could go without, to make your saving budget a little healthier. This should see you have a better idea of how much you’ve got left to play with.
5. Think about the future
Next, it’s time to think about your broader financial goals. Whether you want to start saving for a home, or the trip of a lifetime, your goals are what drive you to set aside your hard-earned money, so write them down. A little tip to get you closer to your savings goals – treat savings like a mandatory expense and put aside your dedicated saving amount the same as you would for electricity or rent.
6. Choose goals you can meet
Finally, look for smaller goals that are achievable with the money that isn’t accounted for in your outgoings. This is the money that you could save over a number of weeks, that helps purchase a smaller ticket item or achieve a shorter term goal, such as a new jacket for winter.
7. Schedule monthly check-ins
The best way to keep on track is to keep checking in on yourself. Make sure to set-up little check-ins on your progress. If you know that 4.30pm on a Thursday is your Achilles heel for deciding to go late-night shopping and buying new clothes, then set a calendar reminder for this time to check your savings balance to remind yourself why you shouldn’t go to the shops. Your pride in yourself may just keep you going!
Our handy online budget planner may help you manage your spending and reach your savings goals sooner.
Whatever you’re goals are, we have a range of accounts to grow your savings.
With the Online Saver, there are no set-up or account keeping fees, with easy access to your funds both online and over the phone. With a great interest rate from the very first dollar, this account is a great way to get started on your saving journey. Applying for an account can be done easily online too.
Whatever you need from your savings, Heritage is here to help.