If you’re reading this as a new student about to head off to university for the first time, then it’s great to see you taking an interest in the money pages!
Life as a student is exciting, but once the exciting times end you don’t want to find yourself limited in options due to poor financial choices and a lack of financial planning.
Receiving student loan payments can make your bank account balance look higher than it ever has, but it only takes one week of ‘Freshers’ Week’ fun to take your new student bank account back to perhaps more familiar lows.
The first step to getting prepared is to ensure you apply for all the funding you’re entitled to. Many students miss out on financial assistance because they don’t know what is out there. The Government’s financial advice for students site www.direct.gov.uk/studentfinance has a calculator that might be helpful.
Another priority should be getting a good Student bank account. Even if you already have a bank account, it’s worth shopping around to see if there is a better one as this is a very competitive market.
One of the biggest benefits of a Student account is an interest-free overdraft facility which allows you to spend more money than you have in your account, up to a certain limit. This can be helpful for the times when you need to make a payment but your student loan hasn’t yet reached your account. However do remember the bank is just lending you this money and it needs to be paid back eventually.
You may be enticed by other benefits that come with opening a student account. These often include student railcards and discount cards which can save you a lot of money, but make sure you look for the benefits that will be most helpful to you.
To keep your new student account topped up, many students consider a part-time job whilst at university. You can earn £12,500 (2019/2020) a year before you have to pay income tax, but depending on how many hours you work a week, you may be liable for national insurance contribution payments.
Whilst the extra money coming in is helpful, deciding whether or not to work depends entirely on your course and whether you can juggle the workload. Some students prefer to work during the university holiday periods and keep their head down in the books during term-time. If you do wish to work during term-time, look for jobs on campus. There may be more competition for these jobs but the employer will understand your university commitments better than outside employers and will be potentially more flexible and accommodating than working off-campus.
Make sure your first spending priorities are the essentials like rent, food and enough money to get home during the holidays. There are many opportunities to save money though. Insurance is important but you may be able to avoid it if your parents’ home insurance can cover you under the “temporarily removed from home” section, or you may find that your accommodation includes insurance in the rent. Alternatively you may be covered automatically through “block hall” agreements with university accommodation providers.
Text books are often a necessary expense but depending on the subject you may be able to get by on second hand copies sold at substantial discounts compared with buying new.
Lastly, remember if you get into financial difficulties you should contact student support services sooner rather than later. All universities and further education colleges have discretionary hardship funds and can offer short-term loans to help you through difficult periods. If nothing else, these periods will really help you learn about handling your money well as you enter adulthood.
Good luck with your course!
