If you’re heading off to university this autumn, one thing that you might be worried about is managing your own money for the first time. Students are famously short of cash. So to help you start out on the right foot, we’ve put together a few top finance tips for students that’ll help make your money go further each semester.
1. Be strict with your budget
We know, we know – budgeting is pretty dull. But if you blow most of your student loan in Freshers Week, you’ll be living off cornflakes for the rest of the semester.
Your maintenance loan will usually be paid into your account in three instalments at the start of each term. Divide the amount you receive by the number of weeks until the next payment, then minus any fixed costs you need to consider – such as a student bus pass or utility bills. Once you know how much you’ve got to spend each week, you can work out how much to budget for food, nights out and anything else you’ll need to pay for.
2. Consider a student bank account
Student bank accounts often come with 0% overdrafts that allow you to withdraw more than the amount you have in your account up to a certain limit. This can help give you a bit of a buffer if your maintenance loan doesn’t stretch that far and will mean you don’t get charged for accidently going overdrawn.
But remember, a student overdraft isn’t free money. You’ll need to pay back anything you borrow. What’s more, if you’re still in your overdraft once you’re no longer a student, you’ll usually be charged interest on what you owe. So, even though a student bank account is a good idea if you need a bit of a cushion, remember to use it with caution.
3. Be smart about your household bills
If you’re moving into a student house, sorting out household bills can cause a bit of friction. If bills aren’t included in your rental agreement, you’ll need to work out the best way to pay for water, electricity, broadband and your TV licence.
One option is for each housemate to set up a monthly direct debt into one person’s bank account and have the bills come out of there. However, this means that one housemate will need to be willing to take on the responsibility of paying the bills each month – something most of us would probably want to avoid. That said, if you are brave enough to manage your household bills, you could give your credit score a boost by paying all the bills on time.
Alternatively, you could set up a joint bank account to share the burden. The downside of this is that by setting up a joint bank account with a flatmate can mean you become financially linked. This means that if you apply for credit in the future, credit referencing agencies can also look at your housemate’s credit report while making their decision. So, if they have a poor credit history or a lot of debt, you may want to keep your finances separate.
Finally, there are businesses out there like Billing Better or acasa that allow your housemates to pay into one account and will pay your bills for you. You may find that not only is this less stress, but it’s also easier to track who’s paid and who hasn’t.
4. Take advantage of discounts
One of the best things about being a student is all the discounts available to you. If you have a student card or NUS card, you’ll get money off in many clothes stores, on your groceries and even at local attractions. So, before you go shopping, check where you can get discounts and if you can save on your spending.
5. Don’t pay for Microsoft Office
When you start university, you’ll usually be set up with an Outlook email address. If this is the case, you won’t need to pay to use Microsoft. Instead, you can access the entire Microsoft Office Suite, including Word, Excel and PowerPoint, through OneDrive. Simply enter your new email and password to get started.
6. Take care when renting
If you’re renting, you’ll need to pay a deposit before you move in which you should get back at the end of your tenancy if you keep your student home in good condition. If you spot any damage to your property when you first arrive, take photos, note them on the inventory report and send them to your landlord as soon as possible. This will help you dispute any damage claims that weren’t your fault when you come to move out.
7. Look after your credit score
When you’re a student, looking after your credit score isn’t exactly one of your top priorities. However, being mindful of it while you’re young can save you lots of money on loans or mortgages in the future.
Registering to vote is a really easy way to give your credit score a boost. It helps lenders confirm your address, proving you are who you say you are.
You’ll also want to make sure you pay all your bills on time – especially if any are in your name. This is a good way to build up your credit score without borrowing money and getting yourself into debt. But remember, not paying your bills on time can have the opposite effect – so try not to forget about them.
Finally, if you’re very confident in your money management skills, you could get yourself a credit builder credit card to start working on your credit score right from the off. When used to pay for small amounts each month and repaid in full, overtime your credit score should improve. However, you may need an income to be eligible and interest rates could be high. So if you do think one is right for you, make sure you use it sensibly and avoid getting into debt.
From sticking to your weekly budget to seeking out a few savvy student discounts, keeping on top of your finances at university will probably be easier than you think.