With the A-level results coming out, the long wait for UK school leavers hoping to go to university will soon be over. All the hard work that has been put into achieving the grades required will now pay off and the fun and freedom that is student life can begin. This may have been the case in the past, but the notion that university life is socially and financially responsibility free is now lamentably outdated. These days, if you want to study beyond the age of 18, learning becomes very expensive.
According to the National Union of Students (NUS) the typical cost of living expenses at a university outside London are around £8,600 a year for the essentials of food, rent, fuel, books and tuition. For students' studying in London they can expect to pay over £10,000 a year.
Barclays Bank has calculated that currently the average graduate leaves university owing £13,501. Jeremy Law, the head of student and graduate banking at Barclays said, "students starting a three-year course this September could be graduating with debts of almost £20,000…graduates will find themselves with debts for years to come which may affect their ability to buy homes and invest in pensions…prince or pauper, these levels of debt may act as a deterrent to some people considering going to university."
With student debt growing every year - financial comparison sites like Moneynet are seeing an increased need for students to take control early and carefully plan for their future. Richard Brown, Chief Executive of Moneynet said “We all understand the importance of budgeting, but for students this can be especially difficult.”
HSBC has estimated that there will be a difference of around £6,400 between the average student’s income through loans and their total expenditure this year, making the skill of how to budget effectively a vitally important one to develop early on in a student’s life.
A spokesperson for the NUS said, "When you get your student loan it can seem like a lot of money. And for those who have never had to juggle lots of money before it can be difficult not to go out and blow it.”
There is help available from the NUS and other sources to students who get into financial difficulty. The NUS has set up advice centres which can provide support on money management as well as advice on how to access any other funds such as Higher Education Grants, Childcare Grants, Disabled Students' Allowance, Parents' Learning Allowance, as well as possible reduced rate loans, which may be available dependent on course subjects and individual circumstances.
An important issue for freshers to learn is that making careful financial choices early on, such as the right bank account, can help keep graduation debt to a minimum. By focusing on the interest rates, authorised and unauthorised overdraft borrowing rates, bank charges and ease of access to the money in their account, rather than the host of freebie sign-up gimmicks can make all the difference.
The NUS advises students “not to get a credit card as you will pay exactly the same high interest rates as everyone else”. In general, credit cards rarely carry genuinely privileged terms solely for students, however students can still utilise cheap forms of credit specifically devised for their circumstances, such as graduated interest-free overdrafts and low interest student loans, before resorting to a credit card if necessary.
Living at home will help to keep costs down, but for most students, this is frequently either not possible, or not desirable. The best way to make finances go further whilst at college is obviously to get some form of job that will fit in around studying. Although many employers do not like employees having irregular working hours due to external commitments, there are some employers who will veritably embrace students as they can fill in on a part-time basis to cover unsociable hours and holiday periods. Supermarkets, restaurants and bars are ideal for student work, as is working late shifts in large financial firms, being a mystery shopper for research companies, or even becoming a film extra for £50 to £200 a day.
The real problem that needs to be in the minds of all students, though, is that any money that they borrow, whether it is through a loan or a credit card, must still be paid back at some point, even if that time may seem a long way off, and they expect to be earning a high salary. The truth is that there are more graduates leaving university every year, and there is increasing competition for what seems to be a dwindling graduate job market with diminishing pay rates. Students need to take control of their finances as early as possible in order to stop their finances taking control of them for a long time to come.
Whatever your reason for having a tight budget, the truth is that going to the grocery store without a plan is a BIG budget breaker. And sadly all that cash ends up vanishing into our stomachs and then...well, you know what comes next.
But if you only had $300 a month to spend on groceries for a family of four, could you do it? What sort of food would make the list and what would stay tauntingly on the store's shelves?
Could you save $25 a month on groceries? How about $50 or $100?
Possibly you could cut your bill by almost 50% if you
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Mention the “b” word, as in BUDGET, to a friend and they’ll look at you like you have a third eye growing from the middle of your forehead. For most people the word budget too often carries negative meanings such as limits, restrictions, living on an allowance, giving things up, no shopping, no fun.
Unfortunately, the point they’re missing is that a budget doesn’t limit you but instead gives you freedom. That’s right - FREEDOM. The words “budget” and “freedom” are not mutually exclusive, once you understand what a budget can do for you.
Having and using a budget will
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You’ve analyzed your past expenses, put them into spreadsheets, loaded Quicken with all of your data and come up with a budget. Now what? The tough part! You actually have to stick to your budget and put your plans into action. This is easier said than done. In many cases you will have forgotten about your budget and your financial goals 6 months or a year down the road. How do you keep this from happening to you?
Here’s how. Make sure you follow some of these tips below so this doesn’t happen to you.
Every year thousands of families make a fresh decision to start living by a budget. They set up accounts on their home computer, begin to track everything they spend and set limits designed to help them save more and spend less.
Gwen Mathews is the Mother/Chief Accountant in one of these new budget conscious families. She and her husband Pete set up some ambitious financial plans with the goal of paying off their credit card debt. They split their family income up into categories and were doing just great. That is until the holiday season came along.
As Gwen scanned
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Do you know how to budget? Strangely enough, most people are unaware of how to do so. Hopefully, this information will prove to be a useful guide.
As a consumer, you face many choices on how to manage your money. Knowing how to manage money can help you make smart choices. Your money will work harder for you. You'll be more likely to avoid traps that can undermine your ability to attain your financial goals. You'll be in a better position to pay off debt and build savings.
A few simple steps can make a big difference in making your
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