Going to away university for the first time can seem daunting for a variety of reasons. It’s also likely to be the place students get their first taste of what it’s like to manage their own money.
Here’s how you can make the grade when it comes to swotting up on financial know-how:
Money a major concern
Money management is such a big concern among students that many freshers see it as more of an issue than how well they are likely to perform on their course, new research suggests.
Ranking a list of top concerns they had in their first year, 40 per cent of students said that “managing my money” was a key worry, significantly higher than the one in three who put “achieving academic success” at the top.
The study of more than 2,000 students aged 18 to 25 was conducted by the National Union of Students on behalf of student insurance provider Endsleigh.
Many young people are living on their overdrafts week in, week out, the research found, with just under half (49 per cent) of students with an overdraft saying they’re always in the red, while more than one in four (28 per cent) regularly use their overdraft.
Worries about money management aren’t only for freshers – 55 per cent of students surveyed said they haven’t made a plan for paying off their debts.
It seems underestimating the costs involved leads to pitfalls for many students.
While the majority of students claim that before starting university they felt either quite (45 per cent) or very (17 per cent) prepared, three in five (61 per cent felt uni life was more expensive than they had expected.
Start thinking about finances over the summer
While starting university can seem overwhelming, spending some time over the summer making a money plan may help students get into good money habits, which could last through university and beyond.
Alex Jones, student spokesman at Endsleigh, says parents can help by passing on their own experiences of planning and budgeting: “There’s still time to talk about money management before they head off to freshers this year. If you can help them to plan ahead by sorting a budget and organising things they tend to put off – like opening a good student account and getting any gadget and contents insurance they may need – they’ll be able to concentrate on their studies.”
Make a money plan
Here are some tips for students from Endsleigh:
Use budgeting apps. A wide range of mobile apps can help you manage your monthly spend. Understanding what is spent where will make a big difference to having the funds for outgoings that matter.
Set up direct debits for bills. If you’ve got regular outgoings, set up a direct debit to pay for it. Once you’ve got the essentials covered, you can enjoy that night out guilt-free.
Avoid nasty surprises with insurance. Accidents happen, so be prepared with the right policy that protects your possessions.
Make small savings. Once you’ve worked out your monthly budget, see how much you can afford to put aside. Even if it’s only £20 a month, you’ll feel much better when it comes to someone’s birthday and you’ve got money saved.