The freedom that university gives to all new undergraduates is amazing. Being able to meet new people, experience new places and go out socialising whenever you want is really what university is all about. However, this all comes at a financial cost. Starting university is really the first time that many students will have to manage their own finances - be that paying rent, budgeting for the weekly food bill or having enough to go out and enjoy socials. On top of this, prices are continually rising and certainly York is not immune to this, with £5 pints in town now the average price.
In this article, Nouse will provide readers with some basic advice on how to manage your finances as a fresher.
The single best thing that you can do as a student, is to work out as soon as you arrive at York what a reasonable and realistic weekly budget is. Once you have this in mind, you can divide up your maintenance loan and personal income accordingly throughout the term. As simple as it sounds at the start of term, sticking as closely as possible to a weekly budget consistently will allow you to enjoy the entirety of the term. I can certainly attest to how easy it is to go hard at the start of term and then finding myself limping over the financial finish line at the end of term and wishing that I’d been a bit more careful at the start of term!
Moreover, keeping track of everything that you’re spending is difficult. I tried to maintain an excel spreadsheet of all of my expenses, however it’s so easy to keep on adding to it throughout the term when it’s so manual. Having visibility of where your cash is going is so important, and many banks do allow you to track your spending based on categories like socialising and groceries, for example. This is much easier than trying to maintain a physical record of all your expenses. Digital banks like Starling and Monzo are particularly good for this. Another useful feature is that they enable you to allocate certain pots or folders within your current account. For students, this could be for specific items like societies or socialising. Being able to track your expenditure makes it easier for you to realise when you may need to hold back on going out for a while or being able allows you to put money aside for that particular trip or item that you really want.
An intimate part of the stereotypical student finance set-up is the frequent use of overdrafts. Overdrafts are very useful in helping countless students meet a particular rent payment, for example, when their finances are stretched. Although they vary according to your bank in terms of their size, most banks offer students an arranged overdraft. This is usually up to £3,000 and crucially is interest free for the duration of your degree. When selecting a bank to open an account with, an interest free overdraft is one of the key things they should be offering you.
However, it’s absolutely critical to remember that all overdrafts are not free money! Furthermore, if you ever exceed your overdraft limit, you are automatically charged a fee by the bank. As previously mentioned, the interest free quality of the student overdraft only lasts for your time as a student. It’s easy to splash out as an undergraduate, however the interest on the overdraft will kick in when you graduate should you still have any money left on it and have to pay it back. Overdrafts can quickly rack up a sizable amount when you start using them to facilitate everyday spending, such as at the pub. Avoiding this is the single best thing you can do to keep on top of your overdraft. What’s also important to remember is that if you decide to use a credit card as an alternative to an arranged overdraft, this money usually has to be paid back within a fixed time frame unlike the broader arrangement of an overdraft. As well as this, it’s easy to forget to pay off an outstanding debt on a credit card. If you leave this for too long, it can start to adversely affect your credit score which, whilst of little concern to students, can sometimes be flagged when applying to certain jobs or applying to rent a property, for example.
As a student, budgeting varies wildly between different people. However, this article has sought to highlight some of the basic things that you can apply on a weekly basis to managing your cash flows and also how to approach overdrafts, which can be both a blessing and a curse. Although never the most exciting thing you’ll do as a student, budgeting properly can make your time at York much easier and less stressful.