Student Debt and Financial Planning

I’m fortunate enough to be answering this question in retrospect – or maybe ‘fortunate’ isn’t the best adjective because my current understanding of effective financial planning comes from my own significant downfalls in money-management. I recently graduated from University after the best three years of my life with a fantastic sum of debt: but I’m not naïve, I knew it was coming and while I have come to terms with the fact that I will be repaying the best three years of my life for the rest of my life I have come to the conclusion that I could have done some things a little better.

   Prior to my first year I worked hard and saved up a sizeable amount of money in preparation for all of those ‘real-world’ expenses I would have to confront at University, like rent and bills and food shopping but I regrettably made the mistake of confusing pound-signs with planning. Thus, I subsequently seared through my bank account with startling speed, without taking any note of where my hard earned money was going until it had almost all gone and then, with an air of ignorant unaccountability, dipped my fingers for the first time into my overdraft.

   This continued well into my second year, until I had accumulated a rather severe-looking minus-number in one account and a zero in the other.

   Something would have to change.

   And this is where I had a very swift education in budgeting; I simply could not continue my cavalier spending whilst ignoring the consequences and so I finally opened up a spreadsheet on my computer and worked out my incomings (which were small) and my outgoings (which weren’t). I started to keep my receipts and measure my spending, keep things balanced from week to week so I had just enough for what I needed. It was not hard; it did not take long – all it took was diligence and a little bit of self-restraint.

   Now, I’ll admit that for me it was probably too late: I had already walked too far along the plank to save myself from the inevitability of getting wet, but it did open my eyes. Planning your finances is just good sense – you don’t have to be a miser or shirk your round at the pub; you just have to be careful and conscious of what you have and how far it will go. A spreadsheet is a good place to start and a good routine for keeping it up to date and accurate (I did a degree in English and so for those columns of tricky numbers I found some help) and, above all, a willingness to keep at it. That is the most important thing: a sense of self-control. Because if you do just throw money around willy-nilly you will encounter problems that you will have to face at a later date and you will realise at that moment that with a little planning the whole bad business could have been avoided.