With many students already returning to university and others soon to head off, we take a look at how to get your student personal finance into shape.
University life is great fun but so too can it be expensive – or at least living on the budget set may be difficult. Here are our top 6 student personal finance tips to help:
1. Get a Good Student Bank Account
Find the best student account package that suits your needs – it’s not a case of one size fits all. Your current account will be where your student loan gets paid into.
A key point to look at is the overdraft costs. Most student bank accounts offer an interest free overdraft up to agreed limits. The overdraft limits often increase each year, for example perhaps starting at £500 in the first year and rising up to £3,00 in the last year.
Of course you don’t want to use so much overdraft that you end up with debt that you cannot pay back.
Consider the added benefits on offer with the student bank account too. Banks want your custom and so will often provid added ‘free’ extras for you to benefit from, including such as laptops, railcards and travel insurance.
Be careful about what personal information you leave around, particularly in relation to your bank accounts. Identity theft is an increasing problem so you do need to make sure you do what you can to protect yourself.
2. Contents Insurance
Student accommodation is often targetted by thieves as they know that invariably they will contain an array of highly valuable electrical items such as laptops, iPads, TVs, iPhones and other valuable items. All of these are very easily transported away too.
There are some insurance policies specifically designed to provide contents cover for students.
Also some house insurance policies, often a high net worth insurance policy for example, offer cover for students possessions. You do need to check exactly what is covered to make sure it is adequate.
3. Work out a Budget and Stick to it
This may seem an unnecessary step, it’s not, setting up a budget and sticking to it is very important for students.
To start with you may only be able to work out a rough budget. That’s fine, just make sure you refine it over time as your spending habits become clearer.
A budget needs to contain your income (student loan, work, parents etc) and mandatory expenses (rent, bills, food, etc)
The difference between the income and the expenses is the amount you have left to spend on other entertainment or one-off treat type expensive.
Be careful you don’t overspend and don’t get yourself caught up in an ever growing amount of debt.
4. Get the right student credit card
Credit cards always help you run the risk of spending more than you can afford and leaving you with debt you cannot repay.
If you do want a student credit card it is important to focus on the interest rates and not just the ‘freebies’
The lower the interest rate the better – be extra careful with intorductory offers that have very low interest rates for a short of period of time but which then significantly rise.
To avoid ending up with uncontrollable debt by the time you graduate, look to at least pay off the minimum amount on the credit card each month.
5. Take Advantage of Special Offers and Discounts offered to Students
As a student many companies will offer you discounts if you show your student card. There are also invariably numerous special offers and money saving deals available from retailers – take advantage of them.
6. Get a Good Broadband Deal
If you live in private accommodation you will most likely need to get broadband set up.
There’s also Pay as You Go mobile broadband to consider, the market for which has significantly grown recently. Make sure you get the best deal, considering the cost of the modem, any set-up charges and then the top up charges per 1Gb or other multiple.