Students who get through university without debt beyond the normal student loan can congratulate themselves on a job well done. Student days are notoriously challenging, both financially and academically. Feeling good about your finances will free your mind from worry, so you can focus more closely on absorbing high-level knowledge.
Either Avoid or Use Credit Cards Wisely
The dreaded credit card is a sore temptation when you’re just squeaking by financially. At the time, spending on a card can give you a rush of satisfaction, but reality soon pinches when repayments roll round.
Unless you really can’t avoid it (and that means a serious shortfall on something vital, not a wish for the latest game or gadget) swear off credit cards completely. The rewards can feel good, and cashback is tempting, but missing or being late with a repayment can knock your credit score for years into the future. Leaving uni with a low credit score can hamper your progress long after the uni days are gone and you’re earning a decent wage.
Wise use of credit cards involves clearing your balance every month. If you can do that, you’ll build up a good credit history and actually boost your credit score. But it takes discipline. Here’s how to do it:
- Arrange to pay a small recurring bill from your credit card each month.
- Set up a direct debit from your bank account to pay off that small monthly loan.
- Cut up the card so you’re not tempted to use it for random treats.
Budgeting That Works
Those nice loan lump sums have to stretch over many months, so don’t be tempted to blow it all as soon as you get it. Work out how much you need for food, rent, clothes, books, entertainment, travel, etc. Tot it all up and divide by however many months until you get the next loan payment or grant. This is your monthly budget. Now subdivide this again, setting aside sums to pay your bills, and allocating a portion to having fun.
If you want to be super-organised, take a leaf out of a bookkeeper’s book, and write it all down. A simple notebook will do the job, or an Excel workbook. You’ll need four columns, headed as date, item, cost and bank balance, in that order across the page. Fill in the bank balance first (consult your statement or online bank account), and deduct regular direct debits for the month.
The other columns should be updated daily (weekly at the most otherwise you’ll get behind and give it up), with the cost of what you buy deducted from the bank balance.
Do this for a month or two and you’ll see a pattern of how you’re spending money. It can be a real revelation when you realise how much all those small, spur of the moment costs add up. This type of accounting shows you straight away if you’re overspending, so you have chance to cut back a little before the damage is done.
Take Help If It’s There
Lots of universities recognise that students sometimes run into financial hardships. They may have assistance programs in place, or offer bursaries and grants to qualifying students.
Find out what help is available from your university before you need it. Money worries can be all-consuming and it’s much better to know where to go for help and what to ask for straightaway, rather than try to figure out answers when you’re already worried sick.
Three, four or more years living on a tight budget can feel daunting. Keep your eye on your main goal and aspirations, budget diligently, and remind yourself how short the uni years are compared to the rest of a successful and satisfying life.