Top money tips for students
When students make the leap from A-levels to higher education, they often take their first steps towards financial independence – and can be confronted with concepts and disciplines for the very first time.
Similarly, second and third year students may be looking to hone their fiscal competence after a carefree first year. This guide offers some top money tips for students, old and new.
Think carefully about the student bank account you choose
Consider carefully what student bank account you are going to sign up to. Getting it right means avoiding expensive fees and interest rates in the future. Never blindly stick with the bank you have (or the bank your parents are with) out of familiarity.
Click here to read the the YourMoney.com guide to picking a student account.
Get a 16-25 Railcard
If you pick a bank account that doesn’t give you a railcard as a freebie, it is definitely worth investing in one anyway. The 16-25 Railcard will reduce the cost of rail tickets by ⅓, and usually costs £30 per year (although there are ways to get discounts). If you spend £90 on train fares in a year (which is usually about two journeys), you’ll make your money back. Frankly, train travel is just unaffordable for most students without one.
Consider your credit rating
It’s probably not something you’ve had to think about before, but whether you realise it or not – you have a credit score. You need to be very careful not to hurt it now, as it will come back to bite you after you graduate and start looking for credit (for credit cards, mortgages etc).
If you don’t pay bills on time (or avoid them completely), it’s going to damage your rating which will remain on your credit history for six years. So face up to it and find out what your credit rating is (you can do this free via Credit Expert), so you know where you stand.
Always get a discount
Getting a discount will never be as easy as it is now. Just flashing your student card gives you access to deals and vouchers which makes everyone else horribly jealous. ALWAYS ask for a student discount, even if you don’t see a sign offering it – if you don’t ask, you don’t get.
Never pay full price for anything and really make the most of freebies. Remember that discounts don’t just mean 10 per cent off your trainers, but also big savings on bills, utilities and travel.
Stick to a budget
You’re going to be poor at univeristy, and it’s really hard to start budgeting when you are skint – but it is so important you do, so you can avoid expensive loans. If you’re using student loans to pay for everything and have no other income, it means you’re going to have to make sure you stretch out your money over the entire year.
Think about what income you have: savings, student loan, money from family, birthdays etc. Then consider your essential costs: rent, bills, food. Whatever you have left (which probably isn’t that much), you use on luxuries, like booze, socials and holidays.
Don’t exceed your overdraft
You’ll have a standard arranged overdraft but the moment you go over that agreed amount, it turns into an unarranged overdraft, which means 0 per cent fees are off the table.
Some banks will give you a small buffer if you go over, but as soon as you exceed that, you are in for some hefty fees. When paying for items on your card, don’t presume that money goes out instantly – it can take weeks, which means you really need to be thinking about (and budgeting) what you are spending not to make that mistake.
Sign up to funding schemes
Depending on your circumstances, there are a variety of student grants and bursaries you can apply for. What is particularly great about these, is that unlike loans, a lot of them don’t need to be paid back.
There are also scholarships and awards, which are handed out by universities and educational trusts. See the government advice on student finance to see what kind of loans and grants are out there. Also check out Scholarship Search to see which might be applicable to you.
Never get a payday loan
Don’t do it. It’s hard being a student, you’re probably never going to be this poor again and they tempt you with easy money. Student targeted payday loan companies offer a 782 per cent representative APR loan, and this could get you into serious trouble.
If you’re seriously struggling, apply for a learning fund first. It’s run by universities (not always necessarily advertised) and helps students who are struggling to pay for their studies.
Beware of peer pressure
Don’t try and keep up with your peers’ spending. You’re going to meet people from different backgrounds, many of which will have plenty of cash to go on holidays and spend serious cash in clubs.
You need to learn to say no. University is expensive – there’s always a night out, party, holiday,or another awesome experience that costs a load of money. If it’s not within your budget, don’t do it.
Charlotte Burns is the editor of Student Money Saver.