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Students Investing In Their Future Need To Manage Their Finances Today
By: R.Green
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lamentably outdated.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) ( http://www.nusonline.co.uk/
) 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
( http://www.moneynet.co.uk ) 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,
or 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.
About the Author:
Richard lives in Edinburgh, occasionally writing for the personal finance blog
Cashzilla (
http://cashzilla.blogspot.com/ ), and hates Brassica oleracea var
gemmifera (aka brussel sprouts). |
