Going to university? Five ways to get your finances in order
A new university year starts this month, and hopefully it’ll be a more normal year for students hitting freshers’ week than last year. But amid the packing, picking your halls and worrying about making friends, lots of people may forget some key financial things before they head off. Here’s your guide to getting your finances university ready.
1. Get a bank account
An obvious place to start is to make sure you have the right bank account for your university experience. You may already have a bank account but it’s worth looking around at the freebie perks on offer from student accounts and switching to one of those.
If you want a 0% overdraft the highest you can get for your first year is from the Santander 123 account, which gives £1,500 for years one to three, and then £1,800 in year four and £2,000 in year five. HSBC and Nationwide offer £1,000 in year one, going up to £2,000 in year two and £3,000 in year three onwards, but the actual amount you get depends on your credit rating.
If free borrowing isn’t your bag then the Santander account also offers a free four-year 16-25 railcard (very handy for visiting friends at other universities or going home in the holidays), while HSBC gives £80 in cash as well as either £20 Uber Eats credit or a year of unlimited next-day delivery from ASOS which is worth £9.95.
If you’re a saver rather than a spender then TSB could be a good option as it pays 5% interest on balances up to £500.
2.Get your loan in order
You should have already applied for any maintenance loan that you want by now, which will help towards your living costs. If you haven’t then get moving, as it can take six weeks to process the application.
If you’ve already applied then make sure you know how much money you’re going to get, so you can plan your budget. The maintenance loan amounts vary dramatically depending whether you’re living away from home or not, if you’re studying in London or elsewhere, and finally on your parents’ earnings.
The difference between the lowest amount of £3,516 and the highest of £12,382 is dramatic, so you need to check what you’re getting.
If your parents are high earners, you’ll get the lower level of loans, which might mean you need to have a conversation with your parents about money, whether they can afford to help you out or how else you’re going to cover your living costs. It might not be a conversation you look forward to, but it’s best to have it now rather than when you get down to your last tin of beans.
3. Renting ‘need to knows’
Usually, first year students will be in halls, which prevents some of the headache of private renting. But some people might have opted for a house share and if so there are a few things to consider.
First up, deposit. You need to make sure your landlord is responsible with your deposit, as it is a big chunk of your money. You need to ensure it’s been put in a deposit protection scheme, which means that if your landlord wants to charge you for something when you leave, you’re much better protected against unscrupulous claims.
Your landlord has 30 days from getting your deposit to put it in a scheme, and should then tell you where the money is and details of the scheme. So, if you haven’t heard from them a month after moving in, make sure you chase them.
Next up is insurance – you might not need your own policy and instead your stuff might be covered on your parents’ insurance, so get them to check.
Finally, bills. If your rent doesn’t include bills, you’ll need to register for council tax, gas, electricity and water (and broadband if you want it). It’s best that one person doesn’t take on responsibility for all of these, so divvy them up among housemates.
Some people might think it’s more efficient to get a joint bank account to deal with all the bills from one pot, but if you do this your credit file will be linked to your housemates, so be wary if they any have debt or a poor credit score. Instead, use a bill splitting app to keep track of who owes what among your housemates.
4. Maximise your discounts
Before you buy anything, check if there’s a student discount for that website or shop. One good option is Amazon’s offer of six-months’ free trial of Prime Student, giving free delivery and access to free TV, music and books. Just make sure you cancel before the trial is up if you don’t want it anymore.
If you’re buying a new laptop or iPad, Apple offers free Airpods (worth £159) for students via the UNiDAYS website. Lots of other retailers will offer 10% off or more for students.
5. Be wary of debt
You may decide to get an account with a 0% overdraft to use as a buffer, but don’t splurge it all in week one. And you may be offered credit cards with initially good rates but be wary of putting any spending on them that you can’t afford to pay off straight away, as the interest can really ramp up.
There’s been an explosion of buy now pay later schemes (Klarna is probably the most well-known) and while these might seem tempting, they can often lead to fees for missed payments and your debt being passed to a debt collector, which will impact your credit file – so be wary.
But if you do need to take on debt to afford basic things (not a night out) hunt out the cheapest option you can – don’t rely on pricey debt like payday loans.