Debt Management

The cost of going to university or college in Ireland can be expensive! Even though the cost of tuition fees in Ireland is paid for by the Government, the cost of living is not. Accommodation and books alone can make a serious dent on your bank balance not to mention the expense of maintaining your social life and wardrobe! For most people, even a part-time job does not cover the outgoing expenses.

For this reason most students get a credit card or take out a student loan with one of the banks which often offer no interest or reduced interest rates to students. Be careful though – many of these interest-free or low interest rates are subject to conditions and often only cover a fixed amount of time.

For example, the Bank of Ireland offers an interest-free €2000 travel loan or an interest-free overdraft facility to students providing they pay the amount back in full within a fixed period of 9 months. If you don’t pay it back it is very easy to fall into the ‘debt trap’ and before you know it your spending and debt management can spiral out of control! It is therefore of the utmost importance to think ahead and not be enticed to borrow money unless you have a plan of how you are going to pay it back in the near future.

So long as you are aware of the consequences of borrowing money it can be a good temporary solution to financial difficulty but you have to ensure you have a realistic plan of action to pay it back before getting in the red. Follow this list of simple tips and you should be fine…

Get a job. If you are still studying, see if you can get a part-time evening or weekend job to help your finances. Even if you only make a few extra quid, you can put this money aside to make sure you pay off your credit card bill, loan repayments or overdraft. So long as your income is regular you will be able to pay off your debt in no time. Getting a summer job is also a great idea too as you can make enough money working full-time for a couple of months to pay off a big chunk of debt. So, if you took a student travel loan or have an overdraft of €1000 for example, you could effectively pay this off with a few pay cheques – just be sensible with your money and learn how to save.

Think outside of the box. Innovation is key to making money. If you haven’t got the time to fit a part-time job in, think of new ways you can make money. Anything from gardening and dog walking services to making clothes or doing the odd DIY job can give you quick cash that you can use to pay off any outstanding debt. So long as you earn more than you spend you will be free from debt – it’s as simple as that!

Plan a realistic budget and stick to it. Cut back on non-essentials and get saving – if you cut back and adopt money-saving tactics you can pay off your loan in no time.

Pay off credit cards first – interest on these can be sky high! Once you have finished paying off your credit card balance cut them up to ensure you don’t use them again.

Pay more than the minimum repayment each month on your credit card or loan – this way you will actually see the amount decrease! Ideally, it is best to pay it all off straight away but obviously this is not always possible.

Get on the property ladder. Once you’ve finished college and you’re earning it is a good idea to start thinking about buying property with friends instead of renting. If there are a few of you in it together you can end up spending the same amount on your mortgage each month as you would on rent bus this way you’re not throwing your money down the drain, instead you’re using it to build you equity.

Plan ahead. Start putting some of your wages into your pension once you start work and you won’t feel the pinch later on. You won’t notice a few euro missing from your pay packet each month but you will notice the benefits of a good retirement fund in later life.