Banking on it

When it comes to managing your money knowing a few tricks can help you make the most of your hard-earned cash

AS A full-time student you probably have a limited income.

But what do you do with the money you do earn?

Do you spend it, or do you save it? Are you a penny pincher or a splurger?

What do you do with the money you save?

Do you stash it away in a secret location in your bedroom?

Or do you put it in a money box or deposit it in a bank?

At some stage in your life you will need to keep account of your income.

For some of us saving money is easy, but for some it takes a lot of effort and self-control.

The bank

Banks provide a useful service which allows you to store your money and access it when you need it. With today’s technology, you can use computers to move money electronically and cash machines to withdraw cash.

If you save your money with a bank, you are paid interest – an amount of money that is calculated on a percentage of your savings.

For example if you have $100 in an account that pays 5% interest, after one year it will earn you $5 interest. It works the other way too. You can borrow money from the bank which then charges you interest on the loan.

For ex- ample if you borrow $1000 for a year at an interest rate of 10%, by the end of the year you owe the $1000 plus $100 interest = $1100.

Budgeting

Understanding your income, expenses and creating a budget is important in helping you keep track of the money that comes in and out of your pocket. A budget is a spending plan. It’s a tool that breaks down how much money you have coming in, how much you are letting go out and how to make the most of the resources you have. There are simple steps to budgeting: Add up your income – the money you earn or receive as a gift or allowance.

Calculate all your outgoings – put what you want to save away first, write down everything you spend, your costs and expenses, i.e. social activities, food, clothes, transportation. How much do you have left over? Figure out if you will spend the savings, or save the money.