If you’re heading off to university this Autumn or considering studying flexibly with The Open University, you will no doubt be examining your finances. Here’s seven tips to help you manage your money, from Senior Lecturer in Personal Finance and Economics, Jonquil Lowe.
1. Choose your account carefully
There are special bank accounts for students, but choose carefully. If money is going to be tight, your best bet may be an account with a free overdraft rather than freebies (such as coach or rail cards). Check out the Which? guide
2. Turn your loan into savings
It may be tempting to burn a hole in your student loan as soon as it hits your bank account! Better to put what you don’t need immediately into a savings account where it’s a tad harder to spend and can earn a little bit of interest even if today’s rates are miserly. (You could even take up that free overdraft as well and let it earn interest in your savings account.)
3. Work out your budget
Draw up a budget. After rent and any other fixed bills, work out what income you’ll have each week and plan your spending accordingly. Use a free budget planner such as the one on the Money Advice Service website.
Team up with student friends to shop together
4. Food shop in groups
If you can, get to know your neighbours and shop for food together, so you can take full advantage of bulk buys and special offers.
5. Find student deals
Check out special deals for students, for example, using an NUS extra card, student rail card and local concessions.
6. Be careful with credit cards
Manage credit cards responsibly
You’re probably being bombarded with offers of credit cards. Don’t get sucked into credit card debt – it’s expensive. However, provided you have the discipline to pay off the balance in full every month, using a credit card for some spending will help you to build up your ‘credit file’. Nearly every adult has one of these – a record of how creditworthy you are deemed to be. Showing you can manage credit responsibly can help you later on to, say, rent a flat, sign up for utilities, borrow for a car or get a mortgage.
7. Set up direct payments
Setting up direct debits or standing orders for rent and regular bills will make sure you always pay them on time and so avoid racking up debts and black marks on your credit file.
Jonquil Lowe is co-author of Essential Personal Finance. A practical guide for students. If you’d like to learn more about personal finance, take a look at our True Potential Centre for the Public Understanding of Finance which has lots of information and resources.
