Money 101: Can your bank balance afford college?

How would you feel if you got in to Harvard and couldn't afford to go? Make sure that never happens.

An impending new year means new beginnings and if most of us could go back in time we would possibly start off with the beginning of our college years or ‘A’ levels onwards.

Being a fan of equal opportunities it irks me to see commercial banks roll out cheesy advertisements where a grey haired couple is seen beaming at a son wearing a graduation cap and a daughter wearing a bridal outfit. What if the daughter wants to become a chemical engineer and all the son dreams of is his Deepak Perwani sherwani? But either way, college education is something that needs careful financial planning because as a friend once said

“It would really hurt me if my kid got into Harvard and I was unable to afford it”.

For the proud parents

Parents who have or are planning on having children must be aware that good schools can cost up to Rs80,000 per annum and local college fees can run in six digit figures.

Add to that cost if your child is an aspiring doctor, lawyer or anything that requires further education abroad. So start saving asap because tuition fees are going higher and your money’s current value is going down.

I would suggest looking into education saving plans managed by UBL, Standard Chartered and Allied Bank. I know of a few parents who have invested in foreign education plans offered by middle-eastern banks, which is not a bad idea if you want to hedge against possible rupee depreciation.

The saving per month can start off with as little as Rs100 and it will be of great help when you have two children possibly heading off to college at the same time. In my previous post I had given suggestions for earning a secondary income from home and this is one of the best reasons to do so. Setting aside a tidy sum every month will not just add the jam to the bread and butter your better half earns, but it could help your little one get the right head start in life.

The diligent student

Congratulations on your admission! The next four years will possibly be the best ones of your life where you will meet friends that last a lifetime and do enough crazy stunts whose memories will make you giggle for the rest of your life too. Whether you are a day scholar or are braving hostel life in another town, I am going to offer you a few tips to lighten your parent’s financial burden and add to the bulge in your wallet.

1)      Ditch the pricey cups of cafeteria coffee: Nescafe 3 in 1 provides a decent caffeine kick in a cup so invest in an insulated travel mug and take your hot beverages with you.

2)      Tutor whiz: You must have done well in some subjects to get admission into a reasonably good college so leverage that skill and start tutoring kids’ grade 7 upwards in Math, Science or English. Even if you teach them for a couple of hours daily you will be able to afford most of your monthly expenses.

3)      Car pool: I do realise it is irritating to get up 10 minutes earlier and then honk on your class mate’s gate while he finishes his three course breakfast but it’s a great cost reducer – and a brilliant way to make friends. One of my closest friendships was formed en route to IBA, so start looking for people living in your area and be prepared to listening to some interesting music.

4)      Part time work: From architecture students doing freelance projects to business students doing internships, there are employment options that not only add to your resume but also help you earn some cash. Learn effective time management and you will be able to maintain your grades, be class representative and work part-time. And the best thing is that it will help you gain inroads into a company or sector that will only be too happy to hire you post graduation.

5)      Stick to a realistic budget: Before you enter the hallowed walls of academia, sit down and make a budget with your parents and stick to it. Allocate funds for mobile phone bills, clothes (bye bye simple days of uniforms) and going out with friends and most importantly for expensive text books.

6)      Out of towners: Familiarise yourself with local transport -  find a reliable cab or rickshaw driver and you will end up saving a lot of time (and self respect) by being self-reliant.

Train journeys are fun in winters so gather a group and head home the less expensive way at least once a year and staying as a paying guest with a local family often works out well for your pocket owing to home cooked meals rather than eating out.

Also, I know visiting your mother’s second cousin is not most people’s idea of fun but give it a shot – worst case you will have stories to share with your siblings – best case it will be a home away from home that will give you home cooked meals and help you save on laundry costs!

College is not about planning your retirement, so do not stress.

Student spending: Get smart and have fun Demand a camera as a college starting present because the memories clicked are priceless. Do not spend too much on clothes -  our local brands are fantastic and you do need comfortable footwear, also this is the time when you can mix it up wear polka dotted socks with an ethnic embroidered bag. So, test your creativity and create a look for the Pakistani youngster. Invest in a good computer and printer with relevant software. It will save you having to wait for your turn in an overcrowded computer lab and prevent premature grey hair caused invariably when you are one hour away from an assignment deadline and the neighbourhood computer shop is shut. Please save! Plan and do go on a vacation with your college buddies – be it to Bhurban in winters or Sri Lanka in summers – the experience will be phenomenal.