Clever ways to help beat the cost of uni
HARVEY JONES REVEALS HOW STUDENTS CAN AVOID ENDING UP WITH A FINANCIAL HANGOVER
GOING to university is one of the most exciting times of your life but it is also one of the most worrying, as money is never far from your mind.
As well as leaving home, making friends and keeping up with coursework, students also get an education in managing personal finances.
For many, it proves too much, and the pandemic has only made matters worse, as students pay up to £9,250 a year for restricted tuition.
An astonishing three in four have thought of dropping out at some point, a rise of a quarter on last year.
While mental health and the pandemic were the major concerns, four in 10 cited money worries as a reason to quit, according to the National Student Money Survey 2021, carried out by the website savethestudent.org.uk
The average student maintenance loan is £340 less each month than actual living costs, so no wonder most struggle to make ends meet.
Many are looking for ways to earn, with two in five setting up their own business or side hustle, while the number gambling on risky cryptocurrencies like Bitcoin tripled in a year.
Students are also less confident about finding a job after uni and expect lower graduate starting salaries in the wake of the pandemic.
Save the Student’s money expert Jake Butler says the pandemic has hit everybody hard but students are among the worst affected.
“With an unstable part-time job market and some parents losing earnings, the usual funding sources are hard to come by,” he says.
He urges struggling students to reach out to their university support services, adding: “There is extra funding available in many cases.”
Don’t spend, spend, spend
Heading off to university is exciting but don’t get carried away or you could regret it later.
Go easy when your first student loan hits your bank account, says Thomas Allder, customer director at Vanquis Bank.
“It can be tempting to spend like there is no tomorrow. Instead, allocate yourself a weekly budget so you are not caught short a month or two down the line,” he says.
This should take into account your loan and any income you have, minus tuition fees, rent, mobile phone bills and other essentials. “The amount left over needs to be enough to pay for your food, transport and fun for the rest of the term.”
Thomas says you can budget easily by creating a section in your Notes app on your phone, or even a spreadsheet. Also, decide whether you need all those subscriptions.
“Netflix, Spotify and others often offer group subscriptions, so see if you can club together with new pals or housemates,” he says.
Many first-time students have a limited credit history, which will partly determine whether you can borrow money and how much interest you pay.
“Download an app from an approved credit reference agency such as ClearScore or Experian to see how to build your score,” he says.
Before taking out a credit card, make sure you understand how they work, and why you need to repay the balance in full each month to avoid interest and fees, Thomas adds.
Strong finances = strong mental health
Dr Dominique Thompson, who worked with mystudenthalls.com to write Student Wellbeing: A Guide To Building Better Mental Health In University, says think twice before buying anything online.
She advises popping items in the basket without completing the transaction until the next day, when they may not seem so essential.
“For essential purchases, try charity shops or apps such as Depop or Vinted. Used textbooks are also often sold through student or Facebook groups,” she suggests.
Be wary of Buy Now Pay Later schemes such as Klarna or Clearpay. They may offer interest-free credit but if you fall behind on repayments it can hit your credit score and you could be chased by debt collection agencies.
“Avoid this slippery slope at all costs,” Dr Thompson says.
Universities, charities and private companies offer thousands of grants, bursaries and scholarships every year.
“Unlike loans, most don’t need to be paid back. Do your research and check your uni to see what may be available.”
Many universities have funds for student hardship and mental health support too.
“Search for ‘student funding’ on your university’s website,” she says.
Check out student bank accounts
The big banks offer freebies and goodies to entice a new generation of students to take out their student bank accounts.
HSBC is leading the charge by offering £80 up front cashback, plus a choice of a £20 Uber Eats voucher or a year of next-day unlimited delivery with online clothing retailer ASOS.
NatWest and Royal Bank Of Scotland both offer £50, according to business information service defaqto.com.
These cashback offers are lower than in previous years, which saw some banks pay more than £100, but are still tempting.
Defaqto banking expert Katie Brain says don’t just look at the freebies but compare all the features and benefits to choose the right account for you.
Banks have also cut the interest paid on balances.
TSB’s Student account pays 5% on balances up to £500, worth up to £25 a year. This will have less appeal to students who have no savings.
Many will want the maximum interest-free overdraft. HSBC and Nationwide offer £1,000 in the first year, rising to £2,000 in the second year then £3,000. NatWest and RBS offer a flat £2,000 from year one.
Pauline van Brakel, chief product officer at money app Yolt, says use your overdraft strictly for emergencies and do not take it into account when calculating budgets.
“Unlike your student loan, you might need to pay it back quickly after you graduate, and those interest-free deals don’t last for ever.”
Allocate yourself a weekly budget so you are not caught short a month or two down the line Thomas Allder of Vanquis Bank