AVOIDING THE HELB LOAN CURSE

Student-Loan-DebtStudent loans are a blessing to some, and a curse to many. Each semester, the awarding of Helb loans is accompanied by frivolous spending by most students. This is however understandable as for many undergraduates, their Helb loan is the largest amount of money they have ever had access to in their entire life. The temptation to spend it on things they have always wanted is so great. The students end up falling into expensive habits. Whether it is buying expensive designer clothes, regular nights out or a crippling alcohol addiction, they quickly find out they are spending more money than they can get hands on. Below are 3 ideas to help you make the most of your student loan and save you the self pity of living in squalor.

Make a budget – A budget will help you track your spending and ensures you do not exceed your limit. It will see to it that you buy what you listed and obviate the case of not knowing where that one thousand bob went to after a shopping spree. To make the budget, start with the most important things down to the least important. The most important thing about a budget is to make sure you follow it. You will notice your loan money will not burn holes in your pocket and you will be able to account for every coin spent.

Spend your loan on the necessary – A friend of mine, who doesn’t even own a smart phone, spent have half of his Helb loan in a night of drinking, yet another spent his entire loan on acquiring a state of the art home-theatre. Their common error is spending on the unnecessary. Learn to spend your loan on creditworthy things such as paying your accommodation, bills, buying food, stationary and buying a smart phone. Nothing is more satisfying than looking back without regret knowing you spent your loan on all the right things.

Save – Student in Kenya are awarded loans ranging from 35k to 60k annually. I’m cognizant that 8k goes directly to fee and the remainder is deposited in the student’s account in two installments. The problem is that banks don’t encourage responsible spending and saving. Students can withdraw whichever amount of money at any time thus stamping out reasonable spending. Consider opening a savings account with good interest and depositing a certain amount of the loan for the rainy season. Saving requires that you reduce expenditure and work on having financial discipline.

Your student loan will probably be the best loan you get in your entire life. It is therefore intelligent to make the most of it. When you finally start paying the loan, it will be more comfortable to know you spent it responsibly than paying for a loan you spent on a girl or bottles of beer. Loans are always paid back.

 

By Jobu

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