Tertiary education is worth it in the long run
MARCH represents kick-off time for the hundreds of thousands of young Australians who are just settling into tertiary education.
Along with lectures and late night study, the years spent at TAFE, college or uni can pose the challenge of getting by on a tight income but it's worth the effort in the long run.
Improving your own skills and qualifications is an outstanding investment in yourself, often with benefits that last a lifetime.
Like any good investment, personal skills and qualifications can deliver outstanding returns.
One study I came across found a university degree can deliver a 65% return. In other words, over a working life, uni graduates can expect to earn 65% more than their mates without a degree.
Research in 2008 by AMP NATSEM found that a uni graduate can earn $1.5 million more in total career earnings than their peers without a degree.
Earning a higher income can also mean retiring with a bigger nest egg. That's because employer-paid super contributions are based on a percentage of your regular wage or salary.
This is all great news for anyone embarking on further study or undertaking new skills. However the immediate challenge can be making ends meet while you're juggling study with a part-time job - and possibly living out of home for the first time.
One of the best ways to keep your money under control is to work out a personal spending budget. This should take into account your income and your regular outgoings, and although you could still be working out your likely living costs, it's critical to have a fair idea of essential expenses like rent, food and transport.
Be prepared to sweat the small stuff because when you're on a low or irregular income, the cost of even quite small luxuries can quickly add up. Spending $20 a week on takeaway lunches for instance, can add up to over $1,000 annually - a big chunk of cash when you're earning a modest income. The government's free TrackMySpend app is a handy tool to record spending, and see where you could cut back.
It's also worth speaking with your bank to see if you're eligible for a fee-free student account - every saving helps. But skip any offers to open a credit card. They make it too easy to overspend - and the last thing you need is to get lumbered with a high interest card debt before you're even earning a full time wage.
There are some excellent online resources available designed specifically to help tertiary students manage their money. The government's MoneySmart website is a great starting point (look under 'Life events and you'), and I encourage students to check it out.
If you can get the money side of your life under control, you're giving yourself a decent chance of being able to focus on your studies and that's the main game. The bottom line is that skills and education are great investments - take advantage of them if you can.
Paul Clitheroe is a founding director of financial planning firm ipac, Chairman of the Australian Government Financial Literacy Board and chief commentator for Money Magazine.