Managing your money as a student can seem daunting, but it’s an important skill to learn. MoneyHelper provides free, independent guidance – please see their tips below to help you make the most of your money:
“Weekly budgeting can make it easier to identify where you can cut back and build a savings buffer for emergencies”
“If you set up a separate account for your savings, you’ll be less tempted to spend it”
“If you’ve already missed more than one payment and can’t come to an agreement with your supplier, you should reach out for help straight away”
THE BASICS
Setting a weekly budget
When a large amount of money lands in your bank account, it can be tempting to spend it all straight away. Remember that this income must last each month or term, so it’s a good idea to work out a budget based on the money you have coming in and out.
Check out MoneyHelper’s page on student budgeting tips and use MoneyHelper’s Budget Planner.
Managing a student account
Going to university and paying for things like rent, food and bills might be the first time you have had to manage large amounts of money on your own. A student bank account is the main way for you to manage your day-to-day money. Freebies that come with a new account can be tempting, but you should consider other factors, such as whether there is an easy-to-use app and what the fee-free overdraft on offer is. It’s also important to check out the charges that might apply if you go overdrawn without permission.
It’s important to check for fees and charges on bank account offers. The MoneyHelper bank account comparison tool has been refreshed to make choosing the right bank account simpler and includes a filter to compare student bank accounts. Visit MoneyHelper’s page on student accounts for more information, including a list of comparison sites to help you compare features.
Building a savings buffer
Weekly budgeting can make it easier to identify where you can cut back and build a savings buffer for emergencies. If you set up a separate account for your savings, you’ll be less tempted to spend it. Visit MoneyHelper’s page on instant access savings accounts for more information.
If you have turned 18, make sure you trace and access the money in your child trust fund to help you budget and save whilst a student.
Student discounts
There are lots of great discounts available to students, so it’s always worth searching online or asking in store every time you shop, and when you sign up to things like the gym or music streaming services.
You’ll be able to get some discounts with just your student email address or ID card, but you can also sign up for more discounts with TOTUM, Unidays and Student Beans.
Be aware that while discounts can help you save money in the short term, it’s easy to be tempted to overspend.
Using an interest-free overdraft
An authorised, interest-free overdraft is a vital lifeline for many students, and it can help reduce the need to take out more expensive forms of credit. Remember though, this is not free money, and you must pay it back after graduation.
If you exceed your interest-free overdraft or go into an unauthorised overdraft, you will be charged additional fees and interest.
Check out MoneyHelper’s pages on overdrafts and on managing debts after graduation.
WHAT TO WATCH
Remaining alert to scams
Make sure you remain alert to scams to protect your personal information and money. Before clicking any links in text messages or emails, or if you have received any unsolicited phone calls purporting to be from your bank or building society or firm asking for money, don’t be afraid to contact the company directly from its official website to check if it’s a real message.
Students are often approached to use their bank account to transfer money illegally – known as being a “money mule”. Using your bank account for illegal activity can mean it’ll be shut down, which makes receiving money from your student loan or job much more difficult. You could also get a criminal record.
You should report any scams you’re targeted with immediately to Action Fraud and check out MoneyHelper’s page on scams for more information.
Being aware of get rich quick schemes
Before you part with any money, you should understand the risks of trying to make money or get rich quick by investing. Students have lost large sums of money by making high-risk investments in cryptocurrency or on trading apps. Check the MoneyHelper page on understanding risks before you invest.
Checking credit scores
It’s important to know that taking out a student loan will not affect your credit score, but other forms of borrowing and financial commitments, such as Buy Now Pay Later agreements or phone contracts, might.
A credit score is used by lenders to help determine whether you qualify for a particular credit card or loan, and even buying a house. A poor credit score could mean you are charged higher interest rates, are given a smaller credit limit or have your credit application denied.
Always make repayments on time to avoid damaging your credit score, and always contact the companies you owe money to if you’re struggling to make repayments.
Be aware of free credit score scam emails, these impersonate credit referencing agencies and ask you to check your credit score. Please only check your credit score using reputable credit referencing agencies, such as TransUnion, Experian and Equifax.
More information can be found on MoneyHelper’s credit scores page.
Understanding contracts for renting or paying bills
It’s important to understand the liabilities you – or your parents/guardians – could face for failing to pay any money owed when signing a legally binding contact in your name.
If a direct debit fails more than once to somebody you owe money to, this could be deemed a breach in contract – which could impact your credit score.
It can be difficult to manage different bills and payments – but the consequences of not paying off some bills before others can be more serious. MoneyHelper’s Bill Prioritiser tool helps you sort your bills and payments in the right order and tells you what you need to do before you miss a payment.
You can find more information on legal and financial responsibilities when renting on MoneyHelper’s website.
Protecting valuables and possessions
You should check whether your valuables and possessions are adequately protected in case of loss, theft or damage. Some items may be covered away from home by your parents’ or guardians’ home contents insurance. If you’re living on campus, ask if contents insurance is included in your accommodation costs.
Visit MoneyHelper’s page on contents insurance and, if you intend to drive, our page on car insurance.
GETTING HELP WITH DEBT
Don’t suffer in silence
If you’ve already missed more than one payment and can’t come to an agreement with your supplier, you should reach out for help straight away. Debt is a reality for many students and can cause stress and anxiety.
All universities and colleges will have student support services, and many will have a student money adviser – they can inform you about financial help available to you as a student, such as hardship funds.
You can also use MoneyHelper’s Debt Advice Locator tool to find an experienced debt adviser you can speak to about your situation and see what your best decision might be.
Find more useful money tips at www.moneyhelper.org.uk. Article courtesy of the Money and Pensions Service.
