Arriving at university is often a first and exciting taste of living independently, and finances will probably feature low on a fresher’s list of priorities. You’ve arrived, and a fairly large sum of money is deposited into your bank account, what else is there to do but spend, spend, spend?
Unfortunately living independently will come with a whole host of new financial obligations and responsibilities, from getting the rent in on time to paying your weekly food or phone bill. The reality is sometimes much more mundane to an endless stream of parties and lectures. However, by laying down some simple financial strategies from the outset you can avoid a great deal of stress and you won’t end up with a financial hangover!
Five top tips on organising your money at university:
1. Budget on a monthly or weekly basis
Before your student loan and/or grant even arrives in your bank account you will have probably received of a breakdown of how much you can expect and when you can expect it across the academic year. Use this to make a plan breaking the regular lump sums you receive into a month by month, or week by week income, and once you arrive at university stick to it as much as is possible. This may seem like an incredibly boring task but it will save you a lot of trouble and financial worry later on.
It might be obvious but faced with a choice between having enough to pay for your weekly food shop or that extra night on the town, make sure you choose the food! If your budget is turning out to be tight you may even want to cut down on unnecessary expenses such as having your car with you when you only live down the road from your campus, or that gym membership that you never use. And always look out for those Shopping Discounts.
3) Plan overspending
A budget can work as a basic plan but doesn’t have to be the be all and end all of your finances. For example, there may be months or weeks when you overspend on your budget, just make sure that it evens out and that any overspending is set right by underspending another month.
4) Look ahead to large payouts
Don’t forget that you will need to plan ahead to meet the costs of large payouts such as car insurance, tax or MOT. Make allowances for any payouts like this to avoid being left short.
5) Don’t get into unmanageable debt
Additional loans or taking out credit cards may seem attractive, offering what seems like an endless stream of ready cash, but you will have to pay it off in the long run and could get caught out by high interest rates in the meantime. If you do end up borrowing additional funds on top of your normal student loan, make sure you read the small print, you know exactly what you will be expected to pay back, and most importantly that you will be able to pay it back in time.
Financial planning doesn’t have to mean you’re a square. You don’t have to count every penny, and you don’t have to be a recluse either. Financial planning at university can in fact save you money in the long run and give you more freedom to enjoy your expenditure safe in the knowledge that you really can afford it.
This post was written by John Hughes who is the resident blogger at Independent Financial Advisor, a UK based site that provides financial guides and tips, as well as access to debt advice charities for those struggling with their debts.