Student life is notoriously tough when it comes to money. In between tuition fees, pub crawls, managing rent and bills, and limited opportunities for learning, those of us who aren’t rolling in vast amounts of trust-fund wealth feel the pinch hard. Even in our parents era, university was a time of financial hardship – and they got grants where we have tuition fees! Over the years, more than a few students have been forced to pack up their studies and head home due to a lack of money. However, you don’t have to be among them. If you’re savvy with what you have, then you don’t have to end up as too much of a have-not. Here are five basic tips to making your money stretch.
1 – Budget, budget, budget
It’s boring, yes, and it’s the tip everyone gives you – but that doesn’t make it any less valid. A budget doesn’t have to be complicated. You don’t have to work out an entire spreadsheet and set up a full accounting system. You simply have to work out how much money you have coming in each month, and how much you have going out on non-negotiable essentials like rent, bills, tuition fees and so on. Whatever is left over is yours to do as you wish with – but it’s worth remembering that you need things like food and bedding to survive effectively. That’s why it’s a good idea to break your budget down, apportioning a certain amount per week to areas of your life like food and travel. Budgeting as a student can be very sobering, as it often brings home just how little you may have. However, this is not necessarily a bad thing. Too many students bury their heads in the sand when it comes to their finances, blow the entire budget in a few nights, and then find themselves in serious trouble until the next bit of income comes in. Having an awareness of the real state of your finances will ensure that, however sparsely you live, your financial situation is always manageable.
2 – Spend wisely
You can make your budget stretch a lot further by cutting out unnecessary expenditure on expensive brands. If you’re used to luxury products in your parents’ house, it can be a wrench going for the economy option when you do your supermarket shop. However, if you fork out for expensive products when there are more economical options available, you’re setting yourself up for a fall. Remember, this kind of income hopefully won’t last forever; you just have to stick it out for a few years until you start earning a bit more. But if you’ve blown your credit rating and accumulated debt simply because you’d rather have the salon-brand shampoo, you’ve acquired years’ worth of struggle to restore your credit score and rebuild your income – for effectively nothing.
3 – Give up non-essentials
There’s plenty that you don’t actually need to personally own while you’re a student. Things like cars, televisions, gym subscriptions, and even textbooks are things that you can actually live quite happily as a student without owning. Prioritize those things you need over those things that you want, and you’d be surprised at how much money you can save. You can go for a run to keep fit, textbooks can be borrowed from the library, and many universities are small enough to walk around easily. If they’re not, forking out for a bus ticket every now and again is cheaper than owning a car. As for a television – leave them for the richer kids (and then invite yourself round with a few beers to catch your favourite show)
4 – Choose the right bank account
You can make your loan go a lot further by choosing to place it in instant access savings account. That way, it should earn you interest which – in a period of your life when every little counts – is not to be sniffed at. You’ll also be less tempted to break in to it if you don’t combine it with the funds in your current account. When choosing your current account, don’t necessarily go for the option that the bank sells as its ‘student’ account. Instead, look carefully at the benefits and drawbacks of all accounts to which you are eligible. Pay particular attention to things like overdraft fees and interest rates – many students end up living on their overdrafts, and you really don’t want to end up paying more than you absolutely have to for the privilege. Some banks offer interest-free overdrafts for a certain period of time. This is a very good option, as it is to be hoped that you will be earning before you incur any charges on your overdraft. Having said this, however…
5 – Be wary of credit
Credit is not free money. While it’s great to have access to funds that you haven’t actually earned, you must always remember that it comes with a price tag. Credit cards and other kinds of unsecured loans find it very easy to make an awful lot of money off students, so you’ll find yourself bombarded with offers of credit from every direction. Don’t take the bait. The reason that credit companies are so eager to sign up students is that they are aware that students, with their general lack of disposable income, are more likely than most to rack up huge credit card bills, which means an awful lot of profitable interest for the companies. Payday loans are particularly noted for this – taking advantage of people’s financial desperation to milk them for every penny they’re ultimately worth. It’s delayed gratification, of course, but the companies can wait…If you don’t have enough money to live off your income in the first place, then you definitely don’t have enough money to add credit interest payments to your burden of outgoings. There are many people out there who are still struggling to pay off credit accumulated during their student years – it’s become a real blight on their lives. Don’t fall into that trap. Get a credit card if you must – but save it for emergencies!
Written by Gemma Brotherton, professional freelance writer.