Guide to being a savvy student
Managing your finances at university can be a challenging and daunting task, and there’s no doubt that many students find it a challenging process. For many it is the first time they have had to take full responsibility for their day-to-day expenses, at a time when reading books (should) take more priority than reading bank statements. Following our five simple steps can really help students stay on top of their finances.
Step 1) Choose the right bank account
Choosing the right student bank account is crucial if you want to be a savvy student, and the bigger the interest-free overdraft the better. Don’t be fooled by freebies either – cinema tickets and CDs may be attractive now, but a five-year railcard can save you a small fortune in journeys home.
Moneyfacts’ tip – NatWest’s Student account is a great offering, offering an interest-free overdraft of £1,250 in year 1, rising to £2,000 by year 5. It also includes a 5-year young persons railcard for all applicants before 31.10.07.
Step 2) Discipline
Because student loan payments are staggered throughout the academic year, managing three large lump sums each term is the biggest problem. It can lull you into a false sense of security and into spending more money than you should - This can cause big problems come the end of term.
Moneyfacts’ tip – Open a savings account for your loan payments and set up a monthly standing order into your student account. That way you’ll be able to keep track of your spending each month with a regular income, and you’ll earn a bit of interest too.
Step 3) Get a part-time job
The unfortunate reality is that going to university is expensive. The best way to supplement your loan payments is to get a part-time job, whether it be behind a bar, stacking shelves or on a checkout. Although you shouldn’t let your studies fall behind, every pound you earn will help pay the bills, and it could help your future career.
Step 4) Set up a budget
Once you know how much money you have to play with, it’s vital you set up a budget and stick to it. Knowing when you need to make all those payments for tuition fees, accommodation, TV licence and other bill payments, they won’t come as a nasty surprise.
Moneyfacts’ tip – Use Moneyfacts’ budget planner to help you work out where your money will go each month.
Step 5) Second hand isn’t always second best
When you get to campus you’ll find yourself inundated with requests for books, you may need to get yourself a bike, and you’ll certainly have to stack your cupboards. However, you can make significant savings by choosing second hand. Buying second hand books are just as good as new ones, and once you have no more need for them - sell them back.
The same goes for bikes and other electrical goods. When grocery shopping, clubbing together with friends can save you money, and make sure you take advantage of buy one get one free offers on your essentials. Why not also check out the ‘reduced’ section, and don’t be afraid of raiding those charity shops either – you really can find some great deals on household essentials.
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