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How to pay for your return to uni

Sally Patten and Larissa Ham share five tips on how to fund your back-to-uni lifestyle.

After 25 years in a well-paid corporate job, it was a hefty financial sacrifice for Geraldine James (pictured) to ditch her career and return to university.

But for a long time the Melbourne marketing manager had been completely “over it”.

Her career crisis was heightened by the fact that, despite years of trying, she and her husband couldn’t have kids.

The situation got James thinking about how she could make the most of life. She eventually decided on a career – podiatry – in which she’d be more involved in helping others.

James, 47, quit her job in February last year, but not wanting to “jump out of the frying pan and into the fire,” first enrolled in one anatomy subject and did work experience to make sure it was the right move.

She and her husband spent about five years preparing financially for James’s career change.

“We spent a lot of time pumping my wage into the mortgage,” says James. “It gave us a bit of practice getting used to living on one income.”

She now cleans houses for eight hours a week, and will pay for her $40,000 degree through HECS-HELP.

Meanwhile, she and her husband have become more aware of their spending habits, and the money they sometimes used to waste.

James says this time around, uni is a very different experience: “Being a mature-aged student you’re more aware of what you’re sacrificing to go back, and what my husband is sacrificing too.”

Five tips for funding your study

So you are thinking of going back to study? If you are, you are certainly not alone.

Australians aged 50 and above are increasingly enrolling in university or college in order to change careers, gain extra skills or improve their earning capability.

But before you choose a course, there is much to consider.

Pippa Elliott of Momentum Planning says she encourages clients to think about how they are planning to apply their new skills. If the purpose is to bring in extra dollars at the end, you need to be honest with yourself about the likelihood of that actually happening.

“If you can’t articulate how the course is going to translate into additional earnings, you might need to re-consider,” says Elliott.

Being honest with yourself about why you want to study might save a lot of anguish and money. If you are lacking in confidence rather than skills, perhaps a three-year full-time course is not what you need.

An alternative to taking a “blanket approach” and studying in the hope of finding a better paid job might be to find a role that you want, start at a more junior level and show commitment by enrolling yourself in a course that is relevant.

Then, of course, there is the challenge of actually studying. Tertiary study is not a free or effortless pastime – and bills still need to be paid.

Five tips to fund your lifestyle and study

1. Map out a plan detailing how you are going to fund the course – financially and time-wise – before embarking. “You are more likely to complete the course if you have a plan in place,” says Fiona Willard, partner at advice firm Foundation Partners in Perth. When are you going to study? Do you need to rein in your expenses, and if so, by how much?

2. Adele Martin of Firefly Wealth recommends that would-be students save about three months of expenses, or at least between $10,000 and $20,000 before embarking on a course. “No one wants to study under stress,” Martin says, so have a stash of cash you can fall back on.

3. If you can’t build a financial buffer right away, consider delaying the start of the course for 6, 12 or even 18 months, or study part time. “If you extend the end goal, it might make it more affordable,” Willard says.

4. Look at your lifestyle to see where you can make savings. One place to start may be your mortgage. Consider whether you can make savings or improve cash flow by moving to interest-only payments, refinancing or shopping around for a better mortgage deal altogether. Elsewhere, the little things, as always, will add up. Ask your friends over for lunch on Sunday rather than go out. And keep it simple or ask them to bring a dish so you have time to study.

5. Martin is not a massive fan of paying for courses upfront, particularly given that the cost of a mortgage is generally more expensive than student debt. Paying upfront also means tying up your money. “You are not paying commercial rates on study loans,” says Martin. Students aren’t required to start repaying their study, or HELP, debt until they earn $54,000. Under the current system, students who make upfront payments of $500 or more receive a 10 per cent discount on the fee, but the discount will be removed on January 1, 2017.

  

October 2016