Learning how to handle your finances if you’ve never budgeted before can feel daunting, so we asked Tom Allingham of Save the Student, and financial coach Catherine Thomas-Humphreys – for their top tips on how to tackle your money at uni, from your first year to your last. It’s time to go to money school…
1. Choose your bank account carefully
As soon as you start looking into opening a student bank account, you’ll be bombarded with dazzling freebies – but try not to be swayed, no matter how tempting they are.
“The most important thing any student can do is to get a good student bank account,” says Tom. “While a £100 Amazon voucher is a nice thing to have, what you’re looking for is the biggest interest and fee-free overdraft you can find, which can go up to £3,000, and is a safe form of borrowing while at university. Even once you’ve graduated, you’ll get up to three years to repay it, still on the interest-free terms.”
2. Open a second account for everyday spending
A good habit to get into as early as possible is having one bank account for your essential outgoings – like phone bills, rent and travel – and another for day-to-day living.
“If your student loan and earnings go into the same account as your spending money, it can be far too tempting,” says Tom. “Digital banks like Starling, Monzo and Revolut offer apps that allow you to manage your money easily on the go, and if you transfer your spending money into that separate account each week, it’s easier to keep an eye on your outgoings.”
3. Write a budget
Another benefit of digital banking apps is that they often include features to help you learn how to budget.
“These apps are great for helping you work out your in and outgoings, as well as showing you where you’re overspending,” says Catherine. “Start by imagining a day being a student and listing all the things you might need to budget for. What do you think you’ll spend your money on? Do you know how much washing powder costs? And have you factored in having fun?
Helping your parents with the shopping before you head off to uni is useful as it’ll help you learn things like how much an average weekly shop costs.”
4. Look into additional support
Even if you’re not from a low-income background you might be eligible for financial support, from bursaries to scholarships.
“Students aren’t always aware of the money that’s available to them, which means over £100 million in available support goes unclaimed every year,” says Tom. “There’s funding for all sorts of things, for instance, the Vegetarian Charity offers financial assistance to low-income vegetarians, while the Graham Trust bursary scheme offers up to £500 to students in Glasgow whose surname is Graham.
“These are unusual examples that show it’s well worth looking into what support you might be eligible for.”
5. Avoid buying now and paying later
That little button next to the checkout can be so tempting and if you’ve already got a student loan it can feel like you have nothing to lose, but adding to your debt is best avoided.
“Don’t ever get a pay day or short-term loan because they’re so expensive,” says Catherine. “I’d even avoid things like Klarna – it’s best to get into the habit of spending money when you’ve got it, rather than before.”
6. Take advantage of cashback offers
Cashback offers and student discounts might not seem like a big deal, but they can quickly add up to a handy pot of cash.
“Sites like Quidco and TopCashback work by giving you a percentage of your money back when you click through to partner retailers via their website,” says Tom. “It’s especially worth doing when it comes to paying bills like broadband and insurance. You should always check for a student discount too as you can often combine these with cashback to stack up your savings. Just make sure you’re only buying things you actually need.”
7. Find ways of bringing in more money
If your budget is looking too lifeless for your liking, it’s time to look at ways of bringing in more money.
“At uni, you tend to have the time and energy to make some extra money on the side,” says Catherine. “As well as looking at flexible working in places like cafés, bars and shops, it pays to get creative. Perhaps you could teach guitar, set up a car boot sale, offer to do odd jobs around town or set up a mini business, like making and selling candles. As soon as you look for opportunities, you’ll start to see more of them.”
8. Check your tenancy agreement
The most important thing you can do when renting out of halls is to read the small print of your tenancy agreement.
“Unfortunately, landlords will sometimes take advantage of the fact that students are first-time renters,” says Tom. “Even if your landlord is legit, clauses like the condition you’re expected to keep the property in can mean the difference between getting your full deposit back and losing money. By law, your deposit also needs to be held in a deposit protection scheme. Lots of universities offer a tenancy agreement checking service, but if that’s not available ask your parents or a friend who’s been through the process before to look at it for you.”
9. Start saving
Building savings might seem like an impossible dream at this stage but the earlier you get into the habit, the better.
“Savings are the first step towards financial resilience, they’re what get you through when your car breaks down – and those who learn to save early are more likely to be able to get on the housing market and grow a decent pension,” says Catherine.
“When you have a debt to pay off, like a student loan, you might think there’s no point in saving, but it’s the best way to protect you against future debt – so try to save something, even if it’s just £1 a week.”
10. Be aware of minimum wage
Although you’re unlikely to have to pay tax on your earnings while at uni, you should check Gov.uk to make sure your earnings are in line with the minimum wage threshold.
“This is particularly important for students because the threshold changes three times between the ages of 18 and 23,” says Tom. “If you have a birthday while you’re working and you’re bumped into the next band, make sure you’re being paid the rate you’re entitled to and if not, speak to HR or your manager.”
And finally… If you get into trouble, talk about it
“If you’ve run up a debt or can’t pay your rent, the best thing to do is talk to someone – the sooner the better,” says Catherine. “We tend to try to solve problems like these ourselves because we’re embarrassed but it’s important to face up to it.”
“Start by speaking to a person you trust with money, such as a parent or your college’s finance department. Be honest with relevant parties – your flatmates, bank and utility providers – and ask for help with payment plans. If things have become more serious, seek professional advice at Citizens Advice or the charity StepChange.”
And of course, the Retail Trust is always there to help you if you need it, by calling our helpline on 0808 801 0808
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