I and A Mag Oct19

Managing Your Money
AT UNIVERSITY
Newfound independence can be exhilarating
when you go away to university for the first time,
but starting life in a new city also has its challenges.
Concerns about studying and making new friends
can creep in as the new term nears, but managing
money is also a significant issue.
The good news is that it’s not difficult to control your finances
and live within your means at university, so where do you start
as a new student?
Make a budget every month
Once you’re set up, budgeting only takes a few minutes every
month, and is a fundamental part of managing money. Initially,
you need to establish how much money is coming in and the
amount you’re likely to spend.
Your income could consist of a maintenance loan, a grant or
scholarship, wages from a job or financial contributions from
parents, and outgoings can be divided into essential living
costs and variable expenses.
Essential living costs typically include food, rent, heating,
council tax, contents insurance, mobile phone, broadband
and TV licence, with variable expenses including items such
as clothes, entertainment, course materials, travel and savings.
It’s worth remembering that you might need to spend more
money on books in the first couple of months, and you may
not know how much food is going to cost initially, but you’ll
soon be able to reliably predict your spending and plan ahead.
Choose the best student bank account
A student bank account should offer easily accessible support
and services specifically designed for undergraduates. An
interest-free overdraft is commonly offered when you open a
student bank account, but a credit card may also be available
subject to eligibility.
Banks often advertise free gifts to entice students to open an
account, but don’t be swayed unless the gift is of particular use
to you. A student rail card can be extremely helpful if you’re
living a long distance from home, for example, as it saves onethird
on the cost of rail travel in the UK
Nationwide FlexStudent
•Fee-free overdraft facility of £1,000 in the first year, £2,000 in
the second, and £3,000 in the third year if you pay in at least
£500 per term, subject to status.
•UK-only call centres.
Santander 123 Student
•Interest-free arranged overdraft of up to £1,500 per year
subject to status.
•A free four-year 16-25 Railcard that saves
you one-third on the price of rail travel in the
UK.
•Cash back of up to 15% at major retailers.
HSBC Student Bank Account
•Interest-free overdraft facility of at least
£1,000 on opening the account.
•Student insurance tailored to your needs.
•.Student credit card with a credit limit of up
to £500 subject to status.
Take advantage of all student discounts
The National Union of Students (NUS) offers a TOTUM card
for one, two or three years, with over 200 discounts available
in the UK and more than 42,000 discounts worldwide. Cards
cost £12, £22, and £32 for one year, two years and three years
respectively, and at the time of writing discounts include:
•10% at Co-op
•25% at Odeon cinemas
•30% at Lonely Planet
What is ‘good debt?’
Credit card debt can be considered ‘good debt’ under certain
conditions, if:
•It’s controlled using the interest-free borrowing periods.
•The balance is paid off in full at the end of each month.
•It allows you to build up a positive credit record.
The same applies to the interest-free overdrafts often offered
to undergraduate students by banks, but if credit cards and
overdrafts are mismanaged it can quickly lead you into serious
debt.
Building up a good credit score at university by paying off your
credit card at the end of each month is important as it shows
you can manage your money. If you apply for a loan after
university you may be able to access better deals, as lenders
base their decisions on your credit history.
Extra money-management tips for university
Here are a few more tips and tricks to make moneymanagement
easier at university:
•Setting up direct debit payments or standing orders for
essential outgoings, such as gas, electricity, council tax and
broadband, ensures you don’t forget to pay.
•As your maintenance loan is paid in a lump sum each semester,
it’s a good idea to divide the money into three and only retain
one month’s money at a time in your current account. You
can pay the remainder into a connected savings account and
transfer another third each month of the term.
•Taking cash out of your account to pay for weekly expenditure,
rather than using a debit or credit card, helps to prevent
overspending.
Managing your money at university doesn’t need to be difficult
– you just have to be aware of how much is coming into your
account and the amount you’re spending. Budgeting is the
best way to stay in control and it’s well worth the extra time to
keep an eye on your finances.
by Ann Haldon
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