When you move out of home and have to take responsibility for your own finances, possibly for the first time, it can be quite overwhelming. What happens if you run out of money before the end of the month and can’t pay your bills? The key here is to take control from the get-go and then follow a few simple rules:
Make sure you have a written budget [see Budgeting 101 on 21 Feb for more on this] This should include a list of:
- Any income e.g. from your parents, student loans, bursaries, wages from part-time jobs, etc
- Fixed expenses like rent and cellphone contract bills, as well as an estimate of variable expenses like food, toiletries, electricity, etc
Set a monthly reminder
Set a recurring reminder on your cell or mail calendar for a few days before your first bills are due, giving you time to check you can cover them and to make a plan if not.
Pay a few days early
Money paid into an account held at a bank other than your own can take up to three days to transfer. Rather do any EFTs a few days early so you don’t run the risk of late payment.
If you realise you’re not going to be able to pay a bill, immediately notify the person or company you owe money to. When they can see you’re taking responsibility, many companies are prepared to make a plan for you to pay at a slightly later date or to pay it off over a longer period. It’s usually when you miss your payment date and then ignore calls from them that things can get nasty.
It’s worth remembering that as soon as you have assets or debt in your name, you start building your credit record. If you work responsibly with money now, your good record will serve you well in the future, whether you want to open a credit or store account, borrow more to study further or apply for a job. Plus it’s good training for when you get out there into the real world and start earning some serious money!