Fiona Price, managing director of IFA Fiona Price and partners, advises drawing up a budget plan at the start of term. "Ask people who've been students recently what kind of costs you can expect. Sit down and do a careful budgeting exercise. And take into account one-off payments such as insurance and television licence, and put the money aside in an interest- bearing savings account to cover these costs."
Be absolutely honest. Don't forget to include newspapers and magazines, coffees and drinks in the bar. Divide outgoings into three sections: fixed outgoings such as rent that have to be paid regularly and on time; variable costs that cover things such as household expenses and travelling; and money you want put aside for bills and emergencies.
Bee Kilroy, the vice-president of welfare and student affairs at University of London Union (ULU), says: "All students need to budget. It's important to know how much money you have coming in and how much is going out." It helps to keep an accurate record of your spending. Keep details of cheques and debit and credit card transactions. That way you'll know if you start to run into problems.
You should make sure you always know how much you have in the bank. You'll find most high street banks are trying to entice you with "freebies" (See boxes on this page). "Banks are vying for your business, but don't be lured in by gimmicks," advises Ms Price. "Make sure the account has all the facilities you need, such as access to cashpoints, and reasonable overdraft costs."
Even if you are struggling with money now, banks and building societies see you as a good long-term investment and are keen to lend you money. Don't go into the red or exceed your overdraft limit without permission. It's expensive. Lloyds Bank charges interest of 7.40 per cent APR on authorised overdrafts, and 26.8 per cent APR on unauthorised.
"Be professional with your bank," says Ms Price. "Tell the bank manager how much you need to borrow and why, and how you intend to repay the money - for example, with a summer job."
Bank of Scotland, Barclays, Halifax, Lloyds, Midland, NatWest and TSB all give fee-free credit cards to students. But use credit cards sensibly. Most cards give you an interest-free period of up to 56 days. If you can pay off your balance in full each month you will avoid paying interest.
Cards from high street banks are not the most competitive on the market, but it's worth taking one and using it sensibly to build up a credit record.
Contents insurance may seem like an unnecessary cost, and you may not have taken many valuables with you to college. But if you are living in halls of residence, insurance is cheap: Endsleigh will cover up to pounds 2,000 of belongings in halls anywhere in the country for pounds 22.
Some insurers offer cover to students as an extension of their parents' home contents policy, so check with your family before you buy your own insurance. Woolwich Insurance Services produces a useful student insurance factsheet.
It's not all bad news for students. If you live on your own or with other students, you don't have to pay any council tax. Dental treatment and eye tests are free if you fill in form HC1, available from dentists, opticians and college welfare centres.
You may qualify for free prescriptions or a discount, depending on your personal circumstances. This benefit is means-tested. Forms from doctors and chemists.
A NUS discount card entitles you to a number of discounts. Most cinemas, theatres and art galleries will give discounts to students.
Hairdressers have model days, where trainees will cut and colour hair cheaply. Your student union will have details. Look on college notice boards for second-hand books and equipment.
If you do run into a money problem, do not ignore it. A classic student tactic is not to open statements and letters from the bank. That is bound to lead to worse problems. As debts increase, so will bank charges.
Bee Kilroy says: "Go and see your welfare officer as soon as soon as there is a problem. We will go through a student's budget and draw up a statement. If a student is in debt we will negotiate repayment terms with the firms involved on the student's behalf."
If you get into financial trouble and don't repay your debts on time, you will find it hard to get credit in future. That may not sound important now, but any problems will stay on your credit record for six years.
The following tips should help you to stay solvent:
Be realistic and allow money for recreation.
Keep a notebook with you at all times and record what and where you spend.
List priority spending such as accommodation.
Take advantage of free banking facilities.
Get a part-time job. Students work on average 12 hours per week in term- time. If you have a job at home, take a reference with you to college.
Keep all your correspondence from the bank
Don't bury your head in the sand if things go wrong. Get advice as soon as possible. The longer that you leave the problem the harder it will be to sort out.
Never exceed your overdraft limit without permission.
Don't guess at what you are spending.
If you go out too much, learn how to stay in with a book as you will save money and save yourself from burnout.
Endsleigh: on campus or check 'Yellow Pages' for local branches Woolwich Student Factsheet 01322 626262 or http://www.woolwich.co.uk
CUT IT OUT
Budgeting can be as easy as cutting out the little things. If you bought the following everyday throughout the academic year, here's a rough idea of what it would cost you:
Cappuccino pounds 200
A newspaper pounds 150
One pint of beer pounds 220
A takeaway sandwich pounds 400
Total: pounds 970