University is a time of freedom.
It’s the first time living away from the watchful eye of parents or guardians. It’s the first time you get a taste of adulthood. Perhaps it’s the first time you have to navigate washing and cooking and taking charge of every aspect of your life.
And for many, it’s the first time you have complete control over your finances.
If you were to ask the people who have finished their stint at uni - those who have swallowed their snake-pints to the tune of ‘down it fresher’, whilst juggling lectures and love and essays and ecstasy - they’ll probably tell you that their finances are more out of control than ever before.
The freedom of university comes with infinite temptations, cheap booze and ultimately financial costs.
As much as you’re learning about whatever subject you’re hoping to master, university is also a good life-lesson. It’s the opportunity to learn about how to manage your money as much as it is to learn marketing or mathematics or medicine.
Use this time to form all of the good habits so you can have fun and have funds.
Budget From The Beginning
Student finance - a blessing and a curse all wrapped up in one figure.
Chances are you’ll know this amount ahead of starting the term, as well as how much you’ll have to pay for halls or rent.
Before the chaos and wonder that is Fresher’s week, use this time of reflection and anticipation to get a budget in place.
Whether you use a spreadsheet or an app or a good old-fashioned pen and paper - note down all of the money you have coming in and all the money you have expected to come back out.
Divide the amount you’re left with by the number of weeks in the term and see how far you can make it stretch.
See if there’s enough left to play with to put something into savings. And then anything you have left over week by week you can either roll over into the next week or put away as well.
For a little more detail, check out our budgeting strategies blog.
Your Overdraft Is Not Free Money
Your overdraft is not free money. Your! Overdraft! Is!! Not!! Free!! Money!!!
It’s a common misconception that an overdraft is a ‘perk’ of having a bank account. Of course, who wouldn’t get excited at the sight of an addition £1000 in their bank and assume they can live like royalty.
As a student, your bank will often automatically set up an overdraft on your behalf and quickly that additional £750, £1000, £1500 will feel like a warm hug whenever you check your bank balance.
While this can be a good safety net whilst it’s at 0% interest, it can easily become a slippery slope to relying on credit.
Try reducing your overdraft ahead of time to avoid getting tapped in fees when you come out the other side. Those three years will be over before you know it and the letters will start arriving asking you to pay off your overdraft.
Finding £300 is a lot easier than trying to pay down £1500.
Why An Emergency Fund Will Save You In Second Year (And Forever More)
As well as being good for, well, an emergency (think your laptop finally giving up the ghost four hours before your essay is due), an emergency fund may be your saving grace when you evolve from a fresher in halls to a second year veteran in your own house.
An actual real-life adult house. But an actual real-life adult house with fees and bills and other adult things that are not so fun.
In most universities you won’t have the option of returning to halls after the first year, so you’ll most likely have to pick the most tolerable humans out of the people you’ve already met, or house-share with complete strangers.
While both options have their pros and cons (imagine moving in with strangers and finding out your new roommate is a baker - free artisanal bread for everyone), both options will more than likely come with a hefty deposit you’ll need to pay up front.
Even though agency fees have been made illegal (woo), you’ll still have to reserve a property by coughing up your first month rent up-front. And if you’re an organised human being, this will probably be way before your student loan kicks in.
If you can, try and put some money away during your first year to ease the pain of ‘the big move’ in second year.
An estate agent will not care if the bank of Mum and Dad said no. And it’s a really bad idea to take out a high-interest loan.
Loop back to the paragraph on budgeting and see if there’s any wiggle room to put more away into savings.
Talk About Money
There is absolutely no shame in messing up. There’s absolutely no shame in asking for help or advice.
In fact, all those people that feel relentlessly out of control now they’ve left university are probably, in part, in that position because they didn’t talk about money.
They didn’t ask for help when they couldn’t afford the deposit - they took a loan out instead.
They didn’t talk about their overdraft and become trapped in a cycle of charges and interest fees.
If you have multiple high-interest debts and think consolidation could be a beneficial way of paying off your debts, check out our peer-to-peer loan calculator to see what interest rates we can offer you.
Make sure you’re always open about your financial situation.
If you can’t afford to go out for drinks again, tell your friends and arrange a big night in instead. If you can’t afford your academic books, talk to your lecturers about buying second-hand books from alumni.
Do You Have Any Tips And Tricks For Students?
The freedom of university is different for everyone.
Let us know what tips and tricks you figured out whilst navigating the exciting, reckless and unfathomable experience that is university life.