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Budgeting – It’s a hard life being a Student!

The majority of people will be of the opinion that students have it easy, lie-ins until noon and an hour or two of lectures a day. One aspect of student life which is not so pleasant is the balancing of finances.

Students who started university in September 2012 or after will be understandably concerned about the £9000 a year tuition fees. As a consequence students face the daunting prospect of leaving university with debts amounting to £50,000 and perhaps more. Despite being a colossal amount of money it should not be a reason to avoid university, especially for those from lower income families and for several reasons. The first is that tuition fees do not have to be paid up front. Secondly you will only pay back what you earn after university and after 30 years your debt will be cleared even if you hadn’t paid a penny back. Recent estimates suggest that 45% of students under the new system will not earn a sufficient amount to repay their loan [1].

Maintenance loans from student finance are paid in three instalments; one in September shortly before the start of university, one in January and the final payment in April, unlike a classic monthly salary. As a result when the loan is transferred into your account it is quite substantial and can give the illusion of great wealth! For this reason it can be all too easy to overspend during the earlier weeks on unnecessary items, leaving yourself short before the next maintenance loan payment. This is why budgeting should be a must for any student.

Money Saving Expert has a very helpful student guide on how to save money and some advice on budgeting.Universities also offer lectures during fresher’s week with money saving advice. The best ways to save money are often the simplest such as buying a flask and making coffee at home instead of buying a Starbucks or Costa coffee. Make a packed lunch instead of buying meal deals from the local supermarket or the university cafes. Try to cut back on fast food and takeaways which in reality are actually quite expensive, this will also do your heath no harm. For many students one of their major expenditures will be alcohol, I kid you not. One very simple way to avoid this is to resist buying drinks in clubs as they are usually pretty steep. Failing that only take a limited amount of money with you, £10-20 for instance, and leave your card at home. Admittedly a risky move and can leave you with no money to get a taxi home, just hope you have generous friends!

The results from the 2014 National Student Money Survey indicated that 1 in 3 students have never budgeted [2]. This statistic came as quite a shock to me considering that students are expected to live of a maximum maintenance loan of £5555 (students living away from home, outside London) [3]. The National Union of Students (NUS) estimates the average living cost for students living away from home outside London at £12,056, although this seems rather excessive [4]. Even by budgeting and reducing living cost there is still a huge void between the maximum maintenance loan and the proposed average living cost. So where does the money come from? The majority of students will have to rely on their parents for financial support. If your parents are unwilling to provide financial support, a part-time job will be a necessity unless you have substantial savings or some other alternative income. I myself could not have gone to university without financial support from my parents, as my accommodation alone exceeded my maintenance loan.

Students from lower income families are eligible for non-repayable maintenance loans from student finance. For those with household incomes below £25,000 are entitled to £3,387, households with income between £25,001-42,620 can claim smaller amounts [3]. On top of this students can also apply for bursaries from the university they attend, the availability and amount of bursaries from the university tend to differ between universities.

Although most students will be expected to live of a small amount of money there are several perks to being a student, mainly in the form of discounts. Many discounts are for clothes shops including ASOS, Hollister, Footasylum, Topshop/Topman and several others. Shops which may be more relevant to your studies that offer student discount are Amazon, Apple, Waterstones and The Times offer a reduced student membership. The discounts usually range between 10-20% off. It would be highly recommended to buy an NUS extra card for £16 as it will without doubt pay for itself over a 3 year university course. I’m sure any student or prospective student who commutes via train regularly will already have a 16-25 railcard, if you don’t buy one! They cost £30 for one year, or £70 for three years, and give you a 1/3 discount on rail fares and with rail prices being so high it really does save you a tremendous amount of money. An alternative to the train are coaches. National Express run coaches all over the country, which are much cheaper than the train, however, they do take longer. They also do student coach cards again giving 1/3 off fares. This is a much better option if you are only commuting occasionally and don’t mind the journey taking an hour or two longer.

Having lived in a house with rent that excluded bills I would definitely recommend to anyone looking for a house to get one with bills included. If you do choose to rent a house without bills included do spare some time researching gas and electric prices to find the best deal, as you can save huge amounts of money. However, you still have to limit the time you have the heating on and be watchful of wasting electricity. You can save a small amount of money this way, but may question the decision whilst trying to find the motivation to get out of bed for a 9 O’clock lecture, and your bedroom is around 5°C. A house with bills included may be slightly more expensive from week to week but you can enjoy a warm house, guilt free.

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