Five mistakes you simply cannot afford to make as a new student

Iremember visiting student friends years ago in their flat on Patrick Street in Cork. Living in a dank basement was bad enough but their grant money had run out too. The only food they could afford to buy was oats and potatoes – and the only thing in the press was marmalade.

For at least a week they had porridge and marmalade for breakfast and lunch, and potatoes for dinner. They made the most of it and still laugh about it many years later, but it can’t have been much fun at the time.

More than 200,000 students are heading for college this autumn. They could find themselves in a similar situation if they don’t learn to manage their money fast. Many will be in charge of their own finances for the first time. That’s a big enough ask for most adults, let alone a teenager who’s never been away from home. Whether you’re a student, a parent or you need a refresher course – here are five basics to help keep your house in order:

DON’T GET RIPPED OFF BY A HOUSING SCAM

Desperate students are in the firing line of the housing crisis and all too often end up the victim of accommodation scams.

The classic is where a deposit is taken for renting an attractive property that the scammer doesn’t own. Housing charity Threshold advises students:

Never agree to rent a property without seeing it first.

Don’t hand over cash and insist on a proper receipt.

Ensure keys work and you have proper contact details for the landlord/agent.

These scams target students who are desperate and act rashly, so don’t leave it too late to arrange accommodation.

RACK UP PENALTY PAYMENTS

Getting a black mark because of a missed payment on a bill could impact your finances for years to come.

You can avoid them by setting up a direct debit for bills in your name. These will be paid automatically so you do not have to remember each month.

But make sure there’s always enough in your account to cover the payment, or there’ll be a charge for each one missed.

Those ‘referral’ fees can add up – and usually come when you are smashed for cash. They also give you a bad name with your bank.

But if you keep your account clean, it will stand to you in the long run and even see you qualify much more easily for a loan, and eventually a mortgage.

PLAY YOUR CARDS WRONG

Interest rates on credit cards can be eye-wateringly expensive. Yes, we’re looking at you Ulster Bank for your 35% rate on student cards. This is 15% more than AIB or Bank of Ireland and 17% more than KBC. Saying that, none of them are cheap.

A student bank loan is much cheaper. AIB’s 8.5% rate is reasonable but Bank of Ireland’s 5% is much lower and would save hundreds on larger loans. Also check out your local credit union. FORGET TO GET INSURANCE Unfortunately, students’ most precious items are the ones that are most often stolen or broken: laptops, mobile phones and bicycles.

Students can make sure their contents are covered for free through their parents’ home insurance cover. This can be extended to them while they are living away – as long as they inform the insurer.

It is something 21-year-old Charlie Turner wishes he had known.

The industrial design student, currently on a placement year from Loughborough University in London, has had items stolen or damaged, three times in the past two years. While living in student halls in his first year his bicycle was stolen from the bike rack outside his accommodation block.

In his second year, Charlie had to fork out hundreds after a friend stepped on his laptop and broke the screen. He then came back to his digs after the Christmas break last winter to find the house he shares had been broken into and several of his belongings, including a Play Station 4, had been taken.

Charlie says: ‘Insurance is something that has always been at the bottom of my to-do list because you never think anything is going to happen to you. It is an area of finance I lack any knowledge of.

‘I do not understand what is and what is not covered by a policy and I did not know I might be covered by my parents’ insurance.’

In 2017 over 6,000 bicycles were stolen nationwide but mostly in university cities – Dublin, Cork, Galway and Limerick. There was also a 10% spike in claims in November and December, said Ciaran Mulligan of BicycleInsurance.ie. ‘Unlike home insurance, a claim on bicycle insurance will not affect your renewal premium. All cyclists should also consider buying a proper lock, which can be viewed on soldsecure.com,’ he advised.

MISS OUT ON GRANTS

There is lots of money available for students through grants, bursaries and assistance. Grants are available on incomes up to €55k depending on the size of your family and parental and student income.

Check out the Student Universal Support Ireland website susi.ie and the Higher Education Authority site. The 1916 Bursary Fund is another option for students who come ‘from sections of society that are significantly under-represented in higher education’. Apply directly to the institution in question.

Students can apply for financial assistance to help them with either temporary or ongoing difficulties through the Student Assistance Fund. There are also music and sports bursaries and scholarships.