Five finance tips for students starting university
By Vicky Shaw
As students get ready to head off to university, many are about to get their first real taste of financial independence - for better or worse.
Starting out as you mean to go on with good financial habits can at least help take some of the stress out of university life (even if it doesn't make your studies any easier!), and hopefully mean less debt at the other end.
So with that in mind, here are five top tips for getting to grips with your finances as a student...
1. Find the right bank account for your needs - not just the one that's nearest to your campus or waving 'freebies' in front of you
Rachel Springall, a finance expert at Moneyfacts.co.uk, says: "The best account will entirely depend on how much the student expects to borrow, the benefits they feel are essential to have included and any additional perks.
"Some providers attempt to entice students with discounts or gift cards, but these incentives could be a waste if not used frequently," she adds. "The students closest banking branch on campus may not offer the best deal, so it's important to compare accounts carefully."
So think about how you will use the account - including any perks that come with it.
Highlighting some deals on the market in August, Springall says students looking for a "sweetener" may well find HSBC's offering of £100 in cash up-front, as well as an incentive bundle of student offers and discounts and a free 12-month British Cycling Fan Membership, attractive.
Meanwhile, NatWest is offering a £10 Amazon gift card up-front and throwing in one year of Amazon Prime Student membership. Or, students can instead choose its free National Express Coachcard or tastecard, which may save them more money if they plan to travel frequently or venture out to eat.
Springall also says Halifax and Santander offer particularly generous interest-free arranged overdrafts for students from the outset, of as much as £1,500. "It's important students keep in mind that overdrafts are not guaranteed and it's vital they use any limit sparingly - overdrafts are a loan and will need to be paid back eventually," she notes.
2. Make a budget
There are plenty of free-to-use budgeting tools available online. Make sure you try to set enough money aside to cover all your outgoings, including spending which may be harder to calculate such as any shared bills if you've got housemates and money for socialising.
It may be easier to keep a separate easy access savings account for social activities, to make sure your social spending is not eating into any money you'll need for essentials such as household bills.
Try to break down your spending habits into weekly amounts, to make sure any lump sums of cash you have will last for however long you need them to.
3. If you have debts which are starting to become unmanageable, don't bury your head in the sand
The sooner you speak to someone, the more options you're likely to have to get out of the situation. Springall says: "To avoid a debt pitfall, it's important that students keep an eye on their day-to-day spending by using online tools and mobile apps.
"If students start to struggle financially they would be wise to seek out some advice, either from their bank or building society, a debt charity, or by having an honest conversation with family or friends."
4. Start a savings habit
This can be particularly hard when you're balancing a very tight budget - but if you try saving small amounts often, you may be surprised at how quickly your savings add up.
"Saving up some cash while studying can be difficult because of social and essential spending, so it may be worth getting a part-time job to get some income and using mobile apps like Chip to automatically put aside cash for a rainy day," says Springall.
5. Don't assume when you graduate that your student account provider is still the best choice
It's easy to stick with the same current account provider. But when you graduate, your circumstances and needs will change again - so make sure you have a fresh look around to see what's out there.
The seven-day current account switch service (Cass) makes switching providers smoother, as payments are automatically swapped over to the new account. A guarantee also means you won't be left out of pocket if something goes wrong with the switch.