Freshers Finance: The Dos and Don'ts

A word of advice, do not leave university with more debt than you need to. Here are some pointers on how not to amass more red hanging around your neck.

Flying the nest, stepping out from the safety of home and leaving for university is a milestone in every young person's life. Yet sadly a high proportion of Generation Y actually return home to live due to crippling university debt, rising rent and huge house prices, not to mention the prospects of finding a job increasingly limited.

Tuition fees for 2015/16 academic year are a whopping £9,000 a year, and only set to rise as outlined in the Conservative Summer Budget. The Tories have said that universities with "high-quality" teaching will have the ability to uncap fees in 2016/17, viewed by some as a move to privatise universities and further push the divide between the rich and the poor.

The Government are also set to scrap the maintenance loan system and replace this with yet another loan, which will add to the amount of repayable debt students will leave higher education with.

A word of advice, do not leave university with more debt than you need to. Here are some pointers on how not to amass more red hanging around your neck.

1. Do your banking research

It's worth doing some thorough research on student finances before leaving for university, especially around the subject of opening a student bank account.

Banks will be after your custom, viewing you as a potential long-term client and continuing to pay into their corporation with your lovely post-graduation higher-than-average-salary. Think about whether you'll be needing a 0% overdraft facility? Does the account come with any perks, for example a free railcard? What's the interest rate if (God forbid) you're overdrawn after graduating? Have a look around for the best offer, and think long-term.

2. Budget

Suddenly having thousands of pounds in your bank account can be jolly exciting. But blow it all in the first few weeks, you'll be not only stupid, but have no money to pay for rent, food or books, effectively ending your university life before it's even begun.

Learning to budget is imperative to surviving university. Figure out how much money you have to live off after subtracting all the necessities, then survive on the remaining funds sensibly.

Keeping track of your finances using a spreadsheet, note pad, app or website such as Money Dashboard or Spendee is a good way to keep track of your spending, and when you realise exactly how much you're wasting on booze, nights out and kebabs you'll be stung into having a rethink of your spending habits.

Working part time throughout uni can also alleviate some financial concerns. If you're a creative try and find some paid freelance work, or if you're reading a more traditional subject finding work that corresponds with this can not only benefit your wallet but your CV too.

If you get desperate for money, why not sell material possessions? Ziffit do a great service on turning electronics into cash. Burn your DVD's or CD's onto a hard drive and flog them if times are tough. Or better still, have a mammoth clear out and drop items to a local charity whilst you're at it.

3. Learn about food

It may seem terribly clichéd to write about students and food, but learning a few simple recipes is guaranteed to save you a fortune, not to mention a lot healthier than living off ready meals.

Tins of beans belong in the 90s and fast food is no longer deemed cool. Think ahead, what's going to be more impressive: the fact you can rustle up a spaghetti bolognese from scratch that feeds four, or the fact you're skint because you spent all your money on takeaway pizza?

Being a savvy shopper can also cut costs. Local markets often do great deals on vegetables and meat. If your nearest food shop is a major supermarket, try and visit late evening when products are discounted. Remember, your freezer is your new best friend.

If you're serious about saving cash, buddy up with some pals and head to your local cash and carry where there's great savings on bulk buying produce.

4. Don't get a credit card or payday loan

Sign up to a payday loan or credit card whilst you're at university and you are asking for trouble. Both will know your student status and the fact you have zero or limited income, essentially selling you more debt.

While credit cards and loans might seem like an excellent way to access money, think about how you'll repay them. Both are known to have substantial APRs and can also really hinder your credit rating. Best avoided at all costs.

5. Don't overpay tax

Having a part time job whilst you're studying is a great way to get some additional funds in your bank account, yet be aware: students are taxed both income and National Insurance the same as everyone else.

Earn over the personal allowance - currently set at £10,600 - and you'll have to pay both National Insurance and income tax. Many students won't earn over the personal allowance amount, but may still be charged tax through their employers PAYE scheme.

Check with your employer, or HMRC who'll be able to help you reclaim any overpaid tax.

6. Don't ignore debt

If you do find yourself struggling financially and have amassed more debt than you feel you can cope with the best thing to do is talk to someone.

Seek out a trusted member of the University team and see what guidance and support they can offer, and check out the Money Advice Service online which has some good information on debt management.

If you have made some poor choices with money, be open about it and don't bottle it up hoping it will all magically disappear because it won't and if you ignore it, it'll only get worse.


What's Hot