How can freshers keep their grades high and their bills low?

A new college and university term is looming. Vicky Shaw explains how students starting out can achieve ‘top marks’ in their finances

Finance and freshers don’t always make an A-grade combination.

As students prepare to head off to university or college, many will get their first real taste of financial independence and there are important decisions about money matters to be made.

With a whirlwind of social engagements to enjoy, the pressure to blow the budget when you are just settling into student life can be strong.

More than half (56%) of students who have already had their first taste of university life say living from home was more expensive than they expected.

Around one in three (35%) felt overwhelmed at the thought of managing their own finances, the research from HSBC found.

HSBC’s study also delved into university students’ outgoings during the first few weeks of term.

It found that, on average, students spent £3,304 during the first 100 days of starting their studies. The bulk of this spending was on rent and food.

The research also showed students splashed out twice as much on alcohol and nights out during their first 100 days as they spent on course materials.

The £3,304 average figure included £1,279 for rent, £670 for food, £184 for travel, £155 for clothes, £328 for course materials and £626 for alcohol and nights out.

As a result of their spending habits, one quarter (24%) of students had to borrow money, use a credit card or dip into their overdraft before the first term was over, the research among more than 1,000 students found.

To fund their first 100 days, three-quarters (75%) used a student loan and 42% had help from family members such as the “bank of mum and dad”.

One in six (16%) had a job to finance their first 100 days and the same proportion used an overdraft.

It seems a lack of planning is behind many money mistakes made at university.

More than one-third (35%) of students surveyed said they wished they would have budgeted more carefully, while 33% felt they should have saved more money beforehand.

One big financial decision students will need to make is which student account provider to use.

Just because a particular bank is nearby or on campus, or offers particular perks, this doesn’t mean it’s the best deal for your needs.

According to Rachel Springall, a finance expert at website Moneyfacts.co.uk, students must be wary not to impulsively choose a bank account simply for the up-front perks.

She has also suggested students should make the most of mobiles and tablets to check their payments on the go, helping them to stick to a budget.

Sharing with your housemates – whether it’s setting up a rota for meals or handing down course books – and making the most of discounts and deals aimed at students can also help to keep you on budget.

Meanwhile, there’s the cost of insuring your belongings to consider.

It may be worth checking whether an existing home insurance policy can be extended to cover possessions at university.

The Association of British Insurers suggests marking valuables with a UV pen, writing down your postcode and telephone number. This will help police identify any recovered property.

It could also be worth photographing your possessions and keeping receipts, in case you need to make a claim.

Photograph: Colin Rennie PRIORITIES: Students can spend up to twice as much on alcohol as they do on course materials.