I wish I knew then what I know now when it comes to student finance. There’s no shortage of budgeting and debt advice around for students. Equally there’s no shortage of financial traps to fall into. I know now that what I needed when I was studying was not a £2500 overdraft for my first year alone, or a credit card. What I needed was simple, honest, realistic advice.
Looking back, there are three B’s that I should have mastered and which I think you really need to fathom as soon as possible. Banking, budgeting, and buying.
B is for banking
An overdraft facility is a likelihood. Some people will need a big one and some just a small one. But believe me when I say that everyone will be paying it back.
Overdrafts with student accounts are interest free so they are worth having. If you don’t think you’ll need the full amount offered, then don’t take it. You can always increase it if you need to. Alternatively, take the full whack and put all of it into a high interest savings account.
Take heed though, go over your limit, even if its only 67 pence, and you’ll be charged up to £35. Recent pressure on banks to reduce their penalties means you could get the charge back, but it’s not a quick or easy process.
Going overdrawn will happen at some point, so bank with someone you know isn’t going to fine you through the roof and leave you thinking that that cheap MP3 player incentive, wasn't such a great deal.
Make appointments at the bank, sure they’re not as convenient as a phone call, but if you can bother to go and sit down with a rep from your bank, it could pay off. You get the added bonus that you’ll be talking to a real person face to face and not someone in a call centre abroad with targets to meet.
B is for budgeting
There are so many generic student budgets and calculators out there but you are not a clone. Your leisure, eating and washing rituals will be different to the next person’s.
Similarly, managing your money to someone else’s facts and figures, especially someone who was probably a student ten years ago at least, is not going to help you. You wouldn’t wear size eight shoes if you’re a size six. Budget the best fit way for you.
One student calculator estimates £20 a week is needed for socialising. But what if you’re a smoker or you live a fair distance from the union and need taxis or buses? Both of those habits will need at least a fiver each out of those 20 sheets.
If a budget is not realistic then you can’t stick to it, meaning overdrawn or skint is going to occur more often than it needs to.