My Guide to Student Finance

mrsmith_3

Hi

I'm not an expert or anything, just a student, but this is how i did it and it worked..basically picked up from parts of this amazing website plus a few ideas of my own. This is aimed at students just abt 2 start uni:

1. Keep the bank account u've always had for savings--make sure they don't change this 2 a student account! Ask for one that does not normally let u go overdrawn. Then take out student accounts with Halifax, Natwest and Smile. None of these say in their t&cs that u can hav only one student account, just that u must regularly fund them all so

2. Pay in ur student loan to one account, ur salary form a part-time job into another and ur parental contribution or grant cheque into another.

3. Use ur overdrafts like loans. Work out the total u will get and divide by the 3 (or 4) yrs of ur course, to work out how much u can spend each yr.

4. Make a list/spreadsheet of ur total earnings in a yr. Take into account ur maintenance loans and grants, ur yearly bank 'loan', ur salary (say £5 an hour--always better 2 count too low--and a realistic no of hours u will work, first in term-time, then in holidays. Add this up) and any parental contributions. This is ur income for a year.

5. Work out ur rent in a yr and ur food (if living in a flat/self-catered halls i reckon abt £1500 a yr, can b more can b less). Minus this from ur yearly earnings.

6. If u can, minus another £1000 for 'the big fund' as i call it. This is for big things like trips away, expensive gigs etc, just things u don't normally buy in ur average wk.

7. What have you got left? Divide this by 12, to see what u can spend monthly, and by 52, to see what u can spend weekly. This is what you have left after food and rent for going out, transport, toiletries etc. Keep ur receipts/a tally and make a spreadsheet of ur outgoings each wk making sure it does not exceed this amount and u will never have more outgoings than income.

8. Find ways to save money! Buy nothing full price...the magic word is clearance, but if not buy either reduced or second-hand. Buy ur 'essential' course books 2nd hand..ebay and amazon r very good, or if not biblio.com or academicbooktrade.co.uk. U can also get books 2nd hand at uni. Never buy 'background reading' txts in advance, u may not need them! Or may b able 2 just borrow from the library. If u ever don't spend ur full weekly budget, either put it forward 2 next wk or put it in2 the 'big fund' so u can treat urself later.

9. Do ur food shopping later in the evening for the best discounts at supermarkets. In particular go to the deli counter where u can get fresh stuff really cheap. Buy mostly tescos-own etc stuff, u will save so much money. If there is lidls or similar near u buy as much of ur weekly shop as possible there as this is again cheaper.

10. Phone--visit http://www.lotsofmobiles.co.uk/index.php?L=12#pops to get a mobile phone almost completely free! There 12 month contract clearance phones, which means u pay the monthly bill but then claim it all back every few months. Get one with lots of minutes eg: O2 with 800 call mins and 500 txts a month, pay it using ur overdraft, claim it all back and voila, all ur phones and txts for the yr cost u nothing! Make all ur calls on there and don't pay ur share of the phone bill in the house. The best phones are 11 months free rental with 12 month contract so u just en up paying £45 or something. NB make sure u claim it back!! They make it fiddly to try and catch people out, so set an alarm on the calendar of ur phone 4 wen u hav 2 fill in the form, and phone the company u bought the phone from 2 make abs sure u hav done everything rite! Send it off with recorded delivery also.

11. Lastly, credit cards. This is not to overspend! It is just bcos u know how much u can spend in a wk/month now, but the funds mite not always b available in ur bank account bcos ur rent has just gone out or ur phone bill is currently eating up ur overdraft. Also wen u first rent uni accom/a flat u hav 2 pay a deposit and 1st months rent upfront which is a big sum! Plus the uni will prob want money for joining clubs etc. So u hav 2 pay alot of money v quickly. So..get a credit card with 0% on purchases for 12 months. This is currently Sainsburys or HSBC. If u cannot get one on ur own bcos u hav no credit history/currently no job/still living with parents, get one in ur parents name and have them put u down as an additional cardholder. Oh, also with the phone, if u hav no credit history u won't b able 2 do the contract thing either so again put it in a parents name and get a standing order set up to pay the monthly bill out of ur overdraft into their account. Make sure it is all paid off by the end of ur yr from ur income, then close it and take out another 0% card for next yr!

12. If u hav no credit history, get a Natwest Student card which is available to you since u hav a student account with them. This is NOT 0% on purchases, u hav 56 days i think 2 pay it back...but basically if u can use it sometimes, just 2 build up a credit rating, and immediately pay it back.

dmg24

Keep the bank account u've always had for savings--make sure they don't change this 2 a student account!

If you do have savings, put them into a proper savings account with a good rate of interest, not a normal current account.

Use ur overdrafts like loans. Work out the total u will get and divide by the 3 (or 4) yrs of ur course, to work out how much u can spend each yr.

No! Use your overdraft as a last resort, and remember, the bank can recall that money at anytime. If you can spare the money, put it into a high interest savings account. Using an overdraft as a 'loan' just means more debt.

So..get a credit card with 0% on purchases for 12 months. This is currently Sainsburys or HSBC.

There are plenty of CC's around with good offers, some better than those quoted above. Best to do your research first.

Oh, also with the phone, if u hav no credit history u won't b able 2 do the contract thing either

Not necessarily the case.

visit http://www.lotsofmobiles.co.uk/index.php?L=12#pops to get a mobile phone almost completely free! There 12 month contract clearance phones, which means u pay the monthly bill but then claim it all back every few months.

I would not touch most of the retailers on that website. Best thing is to look at the Mobiles Board on here and see what offers the reputable companies have at the moment.

mrsmith_3

lol, u seem 2 b quite an expert, thanx for the corrections!

all i can say is it worked for me...ur words r useful cos i am one type of student, but everyones financial situation is different. There is no way i could afford 2 put an overdraft in2 a high interest savings account! And ther is not much point in me putting my 'savings' in2 a high interest savings account as they will b so little and taken out so quickly!

I need the overdrafts, and i can use their full potential as i know i will b on a v good salary as soon as i leave, and so can pay them back. If it wasnt overdrafts it would b credit cards and that is much worse!

I got the sainsburys and hsbc off one of martins articles...if they all give 0% on purchases for 12 months is ther that much difference?

The credit history thing is usually the case but apologies, not always.

Do the reputable companies offer the 12 months claim back thing? If they do, def go for them! If not, i'm a student..a free phone bill is really handy, and even if it goes wrong and u didn't get all the money back, it's what you'd pay anyway with a normal contract+home phone bill.

My way is probs suited for students that hav little money at the moment but know they will get a job with an instant decent salary at the end of the degree..so basically want 2 borrow as much as possible without having 2 resort 2 credit-card borrowing! Bcos obviously u will hav 2 pay the overdrafts back. I think my 3 give you atlst a yr to do so. I think the government maintenance loans are rubbish...around £3,000 a yr to live on! That doesn't even cover my rent!

dmg24

I got the sainsburys and hsbc off one of martins articles...if they all give 0% on purchases for 12 months is ther that much difference?

A few give more. Further, you need to check the terms and conditions of each card. With some, if you miss one payment, you will revert to the APR.

as i know i will b on a v good salary as soon as i leave

Many students work on this theory, however it is not always the case.

Do the reputable companies offer the 12 months claim back thing?

Yes, definitely.

it's what you'd pay anyway with a normal contract+home phone bill.

Even if you do not go for a 12 months free deal, there are plenty of excellent deals around without redemption clauses. Therefore this would not be the case.

Best advice I can give - do you own research. All circumstances are different, not everybody will be best with a mobile redemption deal, not everybody will get a good job on graduation. What is right for one person will be a financial disaster for another.

Lavendyr

Ugh, please could you edit your post so it's in proper English? I'm sure there is some good advice in there but it is almost unreadable for all the "u"s and "hav"s and "2"s.

mrsmith wrote: »

1. Keep the bank account u've always had for savings--make sure they don't change this 2 a student account!

As has been said, rather make sure you've opened the savings accounts with the best rates and if your taxable earnings won't go over the threshold, make sure you apply to receive gross interest rather than net.

mrsmith wrote: »

3. Use ur overdrafts like loans. Work out the total u will get and divide by the 3 (or 4) yrs of ur course, to work out how much u can spend each yr.

This is actually very bad financial advice as it encourages the spending of money that you simply don't have. I overused my overdraft at uni and regretted it because when I came out, although I went straight into a job and was thus able to pay it off quickly, I started my working life with a debt that I could have avoided if I had been more careful.

The best way to plan your finances is never going to be "work out how much you can spend" but rather "work out how much you need to spend" and what your actual income is (excluding any credit) and go from there.

mrsmith wrote: »

4. Make a list/spreadsheet of ur total earnings in a yr. Take into account ur maintenance loans and grants, ur yearly bank 'loan', ur salary (say £5 an hour--always better 2 count too low--and a realistic no of hours u will work, first in term-time, then in holidays. Add this up) and any parental contributions. This is ur income for a year.

Subtract the "bank loan" from that, i.e. overdraft, and this is sound advice. But don't factor the overdraft into your income - it is *not* income.

mrsmith wrote: »

10. Phone--visit http://www.lotsofmobiles.co.uk/index.php?L=12#pops to get a mobile phone almost completely free! There 12 month contract clearance phones, which means u pay the monthly bill but then claim it all back every few months.

I'd advise extreme caution with this kind of contract as they often have ways to get out of paying you back what they owe. My suggestion would be to simply get a PAYG phone and try to avoid using it too much. If you text a lot, use online websites to send texts for free or buy a text bundle for your PAYG each month. Also, it may be best to get a landline set up for calls either from your room or in halls.

Some other tips:
- buy fresh fruit & veg at a market rather than supermarket if possible, often very much cheaper and nicer too
- Don't sign up for everything at the start of term - with the best intentions you won't keep it all up and you may still have to pay the membership fees/may not be able to get them back once signed up. Most good clubs will have free trials before you pay anything.
- Student bars are usually much cheaper than town prices
- Check your online banking (if you have it) frequently and monitor your spending as it is very easy to spend money at uni

Edit: By the way, you can never, ever "know" you will get a decent job at the end of uni. It's not guaranteed. Many graduates spend several months looking, temping and struggling after uni. I was very lucky to get a job straight out of graduation, with a company I'd worked for the vacation before. However several of my friends have not been so lucky and still don't have a permanent job. So please never depend on that graduation salary to pay off all your student debts - it's not a given.

missk_ensington

The demands of being a student are completely blown out of proportion. I'm about to be a 3rd year Ba hons student and my timetable has three 2-hour seminars, two 1 and a half hour lectures and independent work on dissertation per week. My peers rarely get out of bed before lunchtime and spend most evenings in Wetherspoons.

I live on quite a low budget, I feed three on £50-55 a week and that includes mostly organic or local produce as well as my toilettries/washing powder etc. If students learnt to cook they would save SOOOOO much money. I'm sat here at uni right now watching a whole load of students tucking into Greggs for lunch, a pie a drink, maybe a cake - how much is that, £2.50+? No doubt when I head home later the take out shop will be full as well, burger and chips, fish and chips, another £3.50 or more. Thats more than £40 a week on grab food before you've put anything in your cupboards or fridge, or even started on washing powder....soap...toilettries....

It's crazy that students browse amazon daily to find books a bit cheaper, but then blow their savings at Wetherspoons or Greggs or the take out. If you live economically you don't need an overdraft, and a loan, and a credit card..... You should be able to get by on your student loan, money from part time work and any help from parents.

Broke_Student

My take on your advise translates to:
"Borrow money from multiple institutions in your first year, divide it by 12 and make sure you spend it in the allocated week (if not then spend it the next week!). Then once you graduate and your income is at the lowest level it will probably ever be in your career, you must repay the £thousands to the bank within a couple of years or pay a high rate if interest"

It may have worked for you in your circumstances but I would certainly not give the same advise to a student - especially as they may well be at a point in their lives where they are learning to be financially independant and are more likely to go wrong with their finances even without the extra overdrafts!

Some of your ideas on spending are sound but they only really make sense with spending the usual student loans (with much lower repayment demands upon graduation) or when spending real income.

Sorry to be so blunt but I think there is some bad advise in that post so I must give my opinion before anyone reading decides to take action.


A few other points:

Ask for one that does not normally let u go overdrawn.

As your ideas suggest using this account as your 'live' current account, I would suggest taking a small overdraft (£50?) if the bank if offering it. It is much better to go overdrawn a small amount, then paying it off very soon, when paying your bills/essentials than it is to have bounced cheques and rejected direct debits (which may incur their own penalties!).

There is no way i could afford 2 put an overdraft in2 a high interest savings account! And ther is not much point in me putting my 'savings' in2 a high interest savings account as they will b so little and taken out so quickly!

Can't afford it? They pay you (in interest) to have them! Use an esavings account with the same bank to easily manage funds and instantly transfer funds between your savings and current accounts.
Your plan itself suggests that you will have £thousands in this account (through loans, grants, bursaries, overdrafts, parental contributions and employment) so I would think you have something to save. Putting £4000 into an average esaver for just a week before you spend it will give you about £4 in interest for nothing!
You also said yourself that you took out the full overdraft and divided it by the number of years in your course to give you a yearly amount to spend. Therefore in every year but your final year you should have some money to save for the following years (banks tend to give you most of the overdraft early on, excluding halifax who seem to give more later on).

mrsmith_3

ouch, none of my ideas seem 2 b very popular!

yeh i guess ur rite abt the paying back overdrafts thing...i know i will get a good job (£31,000 a yr 2 b exact!) at the end so even if i had say £15,000 worth of debt i can pay it bak in a yr and just live on 15k for a year, since i've bin living on less as a student!

But i don't really understand..if u can get a free phone with careful effort, why not? Why get pay as u go? If u can get a massive overdraft (aslong as u can pay it back), why not? All my income during term-time is taken out 2 pay for my rent--that's student loan,parental contribution,part-time job. I use the overdraft/credit card for the phone bill and all my other expenditure, then wen the holidays come along i work alot and over the year it all adds up. So how would i live on a £50 overdraft? And no, i don't have thousands sitting in a bank i can just bung into a savings account.

I dunno, i just think overdrafts r a great idea, way i see it is most students hav 2 get in2 debt, the student loan is not enough, and ther much better than credit cards...its all frozen till a yr after u graduate, so perfect!

ah well, i guess students can read my bit then read ur bits and make up their minds as 2 what is best 2 them. If anything after reading ur stuff!

dmg24

i know i will get a good job

But how do you know that you will not get sacked/ be made redundant/ become ill? You don't.

at the end so even if i had say £15,000 worth of debt i can pay it bak in a yr and just live on 15k for a year

With the best of intentions in the world, it just does not work like that.

Why get pay as u go?

There are risks involved with the cashback deals, there is no guarantee that you will actually get the money back. Furthermore, on contracts there are always going to be non inclusive phone calls (0870, international calls etc). Some people do not need 800 minutes a month, and may only spend £10 a month on PAYG, with £5 of that being to numbers that would not have been included on a contract plan. Also, PAYG means you are not able to go above a certain amount, so enabling the individual to budget.

i just think overdrafts r a great idea

its all frozen till a yr after u graduate, so perfect!

By which point you could be unemployed.

I have no doubt that your first post was intended to be helpful, but your last post shows real naivety. Naivety is not a bad thing (in someone young, no excuse for me anymore!), but you need to be more open to other people's ideas and advice.

freebie_junkie

i would advise agasinst borrowing on cc's and overdrafts, it could take years to pay off even if you do get a decent job afterwards (seen this happen loads of times, hence why i only use my student loan and earnings).

contract phones can be good if you talk a lot, if i was on PAYG id be bankrupt! but on TMobile flext i get £180 worth of credit for £30 pm, you get a decent phone for free, other goodies if you push at the point of purchase, and i also got a half price line rental cash-back deal with carphone warehouse which they have paid up on!

freebie_junkie

i would check out this thread: http://forums.moneysavingexpert.com/showthread.html?t=531832

for soem great student money saving tips