Embarking on university life is a thrilling prospect, often synonymous with a newfound sense of independence, particularly concerning personal finances.
For many, this marks their initial venture into managing money, a task that can feel daunting amidst a constant stream of student bank account advertisements and extensive checklists for university essentials.
While cultivating budgeting skills and financial responsibility is an invaluable life lesson, navigating this terrain alone can prove challenging.
To assist students preparing for their higher education adventure, The Independent consulted Tom Allingham from the student money website Save the Student, who has shared his top financial tips.
Pick the right student account
“One of the biggest mistakes new students make is not picking the right student bank account,” says Allingham. “I think it’s really tempting to go for one that has the most appealing freebie attached to it or stick with the bank you are already with, but actually the most important thing for most students will be the size of the interest-free overdraft attached to it.”
While most student bank accounts offer an interest-free overdraft, the amount and terms can vary between banks.
“Some of them can offer as much as £1,000 or £2,000 more than a competitor,” highlights Allingham. “The maintenance loan often falls short of living costs, so there’s a good chance that students will need to dip into that interest-free overdraft at some point. Not necessarily to rely upon it, but to have it there as a safety net.”
Don’t blow your money during freshers’ week
“When that first maintenance loan payment arrives, lots of students get over-excited and think ‘oh my God, I have £3,000 sitting in my bank account – this is loads of money’, then go wild during freshers’ week and buy lots of things,” recognises Allingham.
However, learning to budget will help it last the full term.
“Remember that it’s meant to last you until the beginning of January,” says Allingham. “That’s four months of rent, four months of food and four months of bills.”
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Research what bursaries you may be eligible for
All universities offer a range of scholarships and bursaries, but many of these go unclaimed.
“I would definitely advise all students to spend an hour or two online, searching for different funds that they might be eligible for,” recommends Allingham. “If at the end of that hour or two, you come out of it with an extra £1,000 or £2,000 of non-repayable funding, that’s probably going be the best-paid hour or two you’ll ever have in your entire life. So, it’s definitely worth looking at.”
Have two bank accounts
Setting up a second bank account could help with weekly budgeting.
“Get your student loan paid into your student bank account, which has the overdraft and certain perks attached to it, and then transfer over a set amount of money into a second bank account for weekly/monthly spending,” advises Allingham. “I tend to advise students to go for an online bank provider such as Monzo or Revolut for this.
“Having a weekly or monthly spending pot will help you become much more conscious of your spending and tends to make people much more driven to stick to a budget.”
Pack on the lighter side
Don’t rush to buy all the tech, textbooks and kitchenware straight away as you might not need it.
“With certain things, such as a laptop or books, if you don’t think you’ll need it absolutely straight away it might be worth waiting until you’ve enrolled, because then you can use your student discount,” says Allingham. “With a lot of stuff, I would say potentially even consider not buying them at all and instead look at other options. For example, a lot of course textbooks will be available in the library for free.”
A lot of department stores come out with checklists of university ‘essentials’ at this time of year, but they often encompass far more than you actually need.
“If you are in a shared house that has little storage space, you don’t need six plates, six sets of knives and forks and three pans,” says Allingham. “Pack a little bit on the lighter side and then it’s easier to buy one or two bits that you might need later on.”
Cook and buy food in bulk
“Cook six portions of lasagne, rather than one, and then chuck the rest in the freezer,” recommends Allingham. “Then you will have meals there for whenever you want them and doing this will reduce the likelihood of you getting an expensive takeaway or a ready meal. It also prompts you to use all your ingredients instead of throwing them away.”
Buying dried food in larger qualities also tends to be more cost-effective.
“One kilo of pasta is typically cheaper than buying two 500g bags. If you have the storage space, always try and buy bigger quantities of things.”
Suggest cheaper activities
“Be open to suggesting cheaper activities,” recommends Allingham. “Everyone’s going to be tight on money, so if you do want to do something with people who’ve just met, why not suggest watching a film or something on Netflix.
“Don’t feel like every night has to be a massive one where you have go out to an expensive bar, pay for entry and buy loads of drinks.”
