Upfront costs can overwhelm first-year students
Many students heading off to uni this week could be in financial difficulty by Christmas, as the cost of deposits and fees to secure their accommodation, on top of textbooks, travel passes and Fresher’s Week events wipe out their available funds.
A survey of 3,167 new students carried out by money advice site Save the Student concluded that the cost of living for the average student comes in at £770 a month throughout the year – but is significantly higher in the very first term of the academic year.
Failing to plan for these costs can put students on the back foot financially for the rest of their university career.
Save the Student calculates that the average Maintenance Loan instalment* is £600 per month – £170 less than the average cost of living. Families are first port of call for cash top-ups, but the average parental contribution of £138.50/ per month still leaves a shortfall.
The survey found that 78% of students worry about not having enough money to live on, with 46% stating that this worry impacts their mental health. Altogether 61% say the Maintenance Loan is not enough to live on, while 30% don’t feel they receive enough parental support.
Jake Butler, Save the Student’s money expert, said: “Every year we come across far too many students considering dropping out after Christmas simply because they’ve run out of money to live. Most 18 year olds have never seen four-figure sums sitting in their bank account, so it’s vital they understand the money has to last them the full term. Setting a realistic budget (and sticking to it) is a must, and our annual survey helps new students get a clear picture of what’s coming. If a student finds themselves in hardship, they should first speak to their university about special funding and support.”
Here are 5 tips from Save the Student to help make your student loan last all term:
- Put the bulk of your student loan in an instant-access savings account. Each week top up a prepaid card with your budget or withdraw it in cash – then make it last.
- Compare your monthly income (student loan, wages, savings etc.) against living costs and spending. If there’s any shortfall, get on the case pronto: cut costs, find a job, speak with your parents, or get help from your uni.
- Don’t join student societies without going to a free taster session. Check you can afford additional costs – sports kit, events, outings or insurance – before paying for membership.
- Always seek out a student discount, cash back or reward points when buying anything.