Many young adults will soon be getting their first taste of financial freedom as they head off to university.
For many, it will be the first time they have lived away from the family home – meaning they’ll have the new experience of bills to juggle and budgets to keep on top of. While this may seem daunting it’s also an opportunity to develop good money habits which could help you way beyond student life.
Here are some tips from Rachel Springall, a finance expert at Moneyfacts.co.uk, to get students started.
Pick a suitable student account
Starting off with a good bank account can help students over their years of study. Applying for a generous interest-free overdraft could be a lifeline, but you must be able to pay it back once you finish your education. As with any bank account, it’s worth noting that the biggest overdraft limits are not a guarantee as applicants will be credit checked, so those with a bad credit history (such as mature students who may have had issues in the past) may want to improve their credit score first.
Save the change
Each time students buy something they could save the change and watch their savings grow. For example, with Lloyds Bank, when customers are in credit, purchases may be rounded up to the nearest pound with the difference put into a separate account.
By budgeting their way through their course and keeping a tight rein on spending, students will hopefully still be left with some money in their pockets at the end of the week to go shopping or socialising. Little changes such as making a coffee at home, or even lunch, can make a huge difference after just a few weeks.
Get a part-time job
Securing a part-time job can make all the difference for students hoping to build up some spending money. Getting a reference and starting a job will not only help students financially, but also introduce them to new people – helping to build up a social circle and get settled in.
Make the most of apps to save
One of the free apps around that could help students save money without even thinking about it is Chip. The app works out how much money users could save and it will also go one step further and move this money into a separate account, so students are required to do very little to start saving.
Review utility bills
It’s easy to be laid back when it comes to bills, but you should always be on the lookout for ways to save money by switching provider and not take their current offer at face value. It’s also important for students to make sure their fellow housemates understand the monthly costs and the importance of paying bills on time.
Protect possessions with insurance
Consider taking out cover for gadgets and other contents just in case. It’s quick and simple to get a quote online, and students can pick a plan that suits their needs so that it covers their valuable items.
Household outgoings outstrip income for first time since 1988
Households across the UK spent or invested around £900 more on average than they received in income during 2017 – marking the first time in nearly 30 years they had more money going out than coming in – the Office for National Statistics (ONS) has said. Household outgoings last outstripped income for a full year in 1988, according to the ONS.
Commuting costs influence decision on where to live
A quarter of people choose where to live based on the cost of the commute from that location, a survey has found. Renters are more likely than home owners to use commuting costs as a determining factor when deciding where to live, a Lloyds Bank report into spending power found.
Middle-aged prevented from saving by living costs and debts
A third of people did not save any money at all over the past 12 months, a savings index from specialist bank Aldermore has found. The 45 to 64-year-old age group is particularly feeling the pinch, with 36 per cent in this age group not saving, according to the research. Increased living costs and paying debts were found to be common reasons why people said they were not saving, the survey of over 4,000 people across the UK found.