With 50% of students saying finance fears affect their studies, a money skills crash course is in order. Save the Student speaks up on how to swerve debt – and how to protect yourself when the going gets tough.
Talking about money management can be a bit Marmite: you either love it or loathe it. But, if you want to avoid sticky situations later on, you’ll need to get to grips with how student finance works, get a plan, and know how to get help if you need it. We’ll show you how.
1. Face the facts about student finance
Student Riaz told us she got full student finance but, even so, “I struggled to keep my head above water … my loans barely covered my rent”.
If that seems a grim picture, it’s worth painting it up-front. Your maintenance loans and grants probably won’t be enough to live on, while the government will expect your folks to pick up the slack – yet they may not be able to help you much.
Do your sums before you pick a uni. How much is it really going to cost each month on rent, travel and socialising? How far will your student finance get you? Where will the rest come from?
If you’re already there, change-up or downgrade to get a better deal: there are savings to be made on everything from rent to rising mobile phone costs.
And, even if you don’t think you need it yet, start searching/applying for any other grants, bursaries and scholarships you could be eligible for.
2. Plan ahead to stay on top of your cash
At its simplest, budgeting is just about knowing how much you’ve got coming in and how much you spend. If you spend less than you earn, you’re nailing it.
Heads-up: skim off a little from each pay or grant cheque and put it into a savings account first. You won’t miss the money if you do it up-front, and you’ll build yourself a nice buffer.
There are plenty of budgeting apps, calculators and spreadsheets out there. Whichever you use, the top-line figures you’ll want to track are:
Income such as loans, grants, wages, benefits and bursaries.
Outgoings such as rent, bills, food, books, transport and treats.
Bash out a budget as little as once a year and you’ll know how much money you’ve got to play with, whether it’s for going away to uni or jetting off on holiday. If you budget monthly you’ll be able to track your spend and be better equipped to avoid debt. Either way, you may need one if you have to apply for hardship funds later on.
Bottom line? Don’t rely on an ATM to tell you how much you’ve got – stay in control of your cash.
3. Make your money go further
From scrimping on set texts to brewing their own beer, students know how to shave down costs to get a better deal. Here’s how to ramp-up your savings even more:
- Only buy what you need. Save ‘wants’ for treats or birthdays
- Recycle everything, waste nothing
- Never pay full-price if you can barter or blag a saving (or buy secondhand)
- Always shop around for the best deal, whether it’s for rent, bills or bus fares.
We’ve got pretty much every student money-saving trick going – check them out here.
4. Get a job (but only take on what you can cope with)
Income from a part-time job can be a great way to boost your budget and your CV – but not when it costs you sleep and stress.
Sarah, a 20-year-old student in Birmingham, got a job but it meant working late nights on a zero-hour contract. “I’d stay up all night waiting for my wages to go into my bank and then cry my eyes out when I realised it wasn’t enough because the next month I’d have no shifts … I slept through my lectures.”
If you’re already feeling fraught from worrying about finance, skip the extra burdens a job brings and look at more manageable ways to deal with debt below.
Otherwise, working for yourself or starting your own business can be hugely rewarding without compromising on quality of life.
When things don’t work out
5. Get extra funding
There are millions of pounds tucked away in bursaries, grants and scholarships, most of which goes unclaimed by students because they simply don’t know it’s there.
Universities will automatically enter you for any relevant grants, scholarships and bursaries, but it’s worth finding out what else is going, especially if you didn’t apply or get anything in the first year. These cash pots don’t have to be repaid, so they should be your first port of call – talk to your uni’s Welfare team.
If you’re after quick-fix money, ask them about Access to Learning, hardship or emergency funds – again, these usually don’t need to be repaid, but you may need to show them your budget and bank statements.
Students are excluded from some State benefits, but not from money that helps manage a disability or with caring for children. Check your regional government website to see what support is available (search for ‘bursaries’, while you’re at it), or sift through charity offerings at www.turn2us.org.uk.
Don’t forget to look where you live, too. Try your council or school’s career departments for any leads or legacy funds from local businesses, churches or charities.
6. Get support
It’s easy to hibernate when debt or depression are getting to you, but sometimes the little things mean the most. One student, Liz, told us: “Friends always let me know they were close by, bringing me food, offering me lifts and just sending a text now and again asking if I was OK”.
So, don’t ditch your hobbies or discount socialising. Granted you may need to find cheaper alternatives, but keeping active and in contact is a legitimate way to offload stress.
If you aren’t ready to bare your soul to your BFF your uni will be able to refer you to free counselling services. Alternatively, you can contact the Samaritans anonymously day or night: 08457 90 90 90 (UK) / 116 123 (ROI).
Keep your uni in the loop, if you can. “A lecturer from a different course, helped me set up plans for my work and also helped my plan out weeks ahead,” Liz adds. Find a trusted tutor or member of the welfare team to support you and tell you what your options are.
Make sure you’ve got an interest-free overdraft in place (or get a bigger limit) and talk to the bank about how they can help you manage your debts before turning to credit cards or extra borrowing.
7. Get professional debt advice
Forget rogue traders who text and phone you at all hours about consolidating your loans – they’re as trustworthy as a shark in a paddling pool. Be wary, too, of firms that charge for advice or debt management.
Start with StepChange, a free debt advice charity: call ‘em free from landlines on 0800 138 1111.
If you must borrow more to tide you over, turn to the Holy Trinity: your folks, your bank (interest-free overdraft) or your uni. Don’t even consider payday loans. Ever.
Studying should be a stepping stone to better things: if it starts to feel like a boulder, it’s time to get help. You’re now tooled-up to get the support you need and are entitled to: make sure you use it!