A new world of university life is shortly set to open up for thousands of teenagers.
Most new students realise they’ll leave university with a loan they’ll spend years having to pay back once they’ve made it into the world of work.
But new research shows that new graduates will face average debt levels over a third of the average outstanding mortgage.
By the time they start paying back their loans – maintenance and tuition fees – their debts will be well in excess of £41,000, according to The Money Charity, which is 35% of the average outstanding mortgage (£117,162).
Sometimes I wonder if I got lucky when I was a student back in the olden days, with cheap accommodation, council grants and no tuition fees.
£23,187 was the estimated average student expenditure for the 2013/14 academic year* -so budgeting is one of the key skills freshers need to pick up. So we’ve put together ten tips for this year’s crop of new students.
To start with, it’s worth dividing your outgoings into what you need and what you like doing, while working out what you actually don’t need and can probably live without.
What you need: basic living costs like share of rent, utilities, TV licence, council tax & food plus unavoidable university costs like tuition fees, books, and a bit of spare cash for emergencies.
What you like: things like gigs, clubbing, bars, clothes, general entertainment and going out. Try to set a budget for the week or month, and stick to it if you can…
Also work out how much money you’ve going to have at your disposal before allocating a budget – besides any loan or grant you might have got, there might be earnings from part-time or temporary holiday jobs to consider. Once you’ve factored that in, it can be easier to plan how much you’ll have left.
Got a long reading list? Share books with your classmates, borrow long-term from the library, or plunder second-hand book shops where past students will have deposited their old copies.
Used items can be a very financially savvy way of buying the things you like too – things like laptops. DVDs, new or vintage clothes will be in good supply in any well-travelled university town.
Students can be eligible for large discounts on all manner of products and services. NUS Extra is one of some websites worth signing up for. Then there are gyms, cinemas and more that offer cheaper prices with NUS membership. Young person’s railcards and coachcards can also provide big discounts if you’re travelling around the country.
Student bank accounts will invariably offer interest-free overdrafts, usually over £1000, and can also offer other useful services like free or discounted contents insurance.
If you watch TV you’re going to need a licence, but remember you don’t have to pay the whole year up front – you can pay it quarterly or monthly, which can help with regular budgeting.
Finally, food shopping needn’t be last-minute visits to big-name supermarkets – buying in bulk and freezing food, as well as sharing food and meals with your housemates, is a fun and sociable way to save money!