Flying the nest to embark on the journey of starting university is an incredibly exciting time. But the thought of being in charge of your own financial affairs can be daunting. From accommodation to weekly food shops and nights out, you’d be amazed at just how quickly it can all add up.
According to UCAS’s ‘Spend Student Lifestyle 2020’ report, the average student spends £247 per week, and that surges to a whopping £427 in freshers’ week alone.
Managing your money can be tricky. Regardless of what student finance you may receive, it’s important to learn how to balance your finances successfully if you want to thrive throughout your adult life.
Here are some handy tips you may find helpful when starting out.
Budgeting
First things first, you need to work out a budget you can stick to. Whether this is weekly or monthly is entirely up to you.
The easiest way to do this is by taking your full monthly allowance and working backward, subtracting any outgoings such as your accommodation fees, phone bill, gym membership, and any other expenses. Decide what you can afford to spend on your weekly food shop, then anything leftover can be solely for treating yourself – drinks or meals out with friends, new clothes, toiletries, etc.
If you need any further assistance with working out an affordable financial plan, use an online student budget calculator for guidance.
Understanding the dangers of debt
When enrolling at university, taking out a student loan to cover tuition fees is unavoidable for most students. You can pay this off over several years and repayments are calculated around your annual income.
However, some debt can be dangerous and it’s good to be aware of other types of loans you may come across. Although credit cards have their uses, this debt can soon spiral out of control if you don’t keep on top of your repayments. Remember to only spend what you can afford to pay off at the end of the month.
Loans can also be a tempting solution if you’re struggling financially. While some lenders are reliable, others can add high interest rates on top that can result in unwanted debt. Always consider your finances before choosing to take out a loan.
Improving your credit score
When you come to apply for overdrafts, credit cards and mortgages, lenders will check your credit score to see how reliable you are at repaying what you borrow.
The higher your score, the better chances you have when it comes to securing mortgages, renting flats, and even taking out a mobile phone contract. If you wish to find out more, there are lots of online tools to help you check your credit score and improve it over time.
