Student finance: Budgeting clinic

Gwenda Thomas disciplines this year's unruly student spenders
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The Independent Online

The medic

Andrew King, 23, is a third-year medicine student at the University of Leicester.

After changing degree and university from philosophy and politics at Sussex University to medicine at the University of Leicester, I began my new degree over four grand in debt. My tuition fees are paid for and I have a grant too, but I am still dramatically adding to the red every year. And with medicine being a five year degree, this process is only going to continue.

Even with a credit card I find myself struggling with pennies by the end of each term, and the holidays are even tougher. I am literally scraping through until my student loan comes through at the start of the new term.

Admittedly, buying a motorbike during my time as a medic hasn't helped, and is far from being prudent. But I still feel that the current economic situation for medics is not as simple as people often assume.

With the need to build an impressive personal development portfolio [which documents extra-curricular activities, academic achievements, and so on] while studying, I find it difficult to maintain employment, and thus a steady income.

By the time I graduate I will be looking at at least £30,000 worth of debt and the starting salary after graduation is not as fantastic as is commonly perceived.

With more and more medical students within the UK not finding employment upon graduation, my chances of being free of this debt anytime soon are looking increasingly unlikely.

Gwenda's answer:

If you are looking for sympathy Andrew, I think you have come to the wrong place. You are luckier than many students: your fees are being paid and you receive a grant. Of course the motorbike is an indulgence. Sell it immediately! Or at least lay it up. It is hard to believe that it is anything but a drain on your resources. A stint in A&E would cool the ardour of any two-wheeled petrol-head. Think about it!

You made a duff start, but in changing your courses you made the right decision and should be congratulated for going back to square one, and for passing your science A-levels in just one year. If you had realised your mistake in the first term at uni, you might have escaped paying fees. As it is, your £4,000 debt was an expensive mistake – but it could have been much worse. Today, you'd be facing a debt nearer £8,000.

The need to create an "impressive" personal development portfolio to enhance your CV does put an extra burden on students, especially in competitive fields such as medicine.

But does it really preclude earning extra cash? A course in time management might well be the answer – readily available at Leicester and most other universities.

I think you are a worrier. A debt of £30,000 on graduating sounds frightening, but it's not unusual among medical students. The loan repayment scheme is very fair and based on what you are earning, not the size of debt.

As to securing employment when you qualify, that's another three years down the line. You have already demonstrated you have the determination to succeed against the odds – another important brownie point to add to your CV.

The Londoner

Saquib Malik, 21, is in the second year of a history degree at Soas.

Like most students living London, I've found that financial woes are never far away. As my parents are unable to help financially, I receive a large student loan, as well as a grant and a bursary from my university on top of it all. However, I have discovered that I still struggle to pay the many bills that all students encounter living away from home.

In hindsight, I feel that forward planning would have helped me to pay less for my accommodation, and eased the monthly burden of bills. But while I have thought about getting a part-time job to help generate a more consistent income, I found that all the support I receive has enabled me to concentrate purely on my studies.

Like all students I do enjoy going out, and I feel that because I often stay in to save money, when I do go out it ends up becoming a very expensive ordeal. This mentality of course does me no favours when I attempt to be prudent.

But despite all this, I still enjoy university and do believe that the large amounts of debt that I am undoubtedly taking on, are more than worth it. What I have learnt so far through my university experience is that a more mature planned approach to my finances would go a long way to easing any worries caused by money.

Gwenda's answer:

Stop being hard on yourself. London is a voracious monster, it will eat up every penny you have and more. Most people underestimate the cost.

Compared with many students, I think you have a very mature attitude to money and your own shortcomings. You don't talk of stacking up excessive mountains of debt – no loan sharks demanding payment or overdrafts dragging you further and further into the red.

Fortunately you recognise your biggest weakness – uncontrolled splurging when off the leash. Discipline is called for!

The best advice I have, came from a student. Before a night out, draw from the bank only the amount of money you intend and can afford to spend. Leave all other cash and credit cards behind. That way, when the money's gone you know it's time to go home.

Second year is always tough for students. In the first year, most students live in university accommodation and are cushioned from the real cost of living. Once in the real world, the bills come rolling in.

As early as the first term at uni is the time to start planning next year's move out of halls. Leave it much beyond January and all the best affordable accommodation will have gone.

The choice in London for students is high rents and living close to college, or lower rents with extortionate fares and a long commute.

You are in a happy position of having enough support to live on. Your studies should always take priority, but working a few hours a week in the student bar, or the university itself, would give you a sympathetic employer, plus a little extra cash to spend or possibly splurge!

The Sinner

Jon Gullidge, 22, graduated in psychology from the University of Lincoln in 2008.

Going to university was a last-minute decision for me, so I hadn't really thought aspects of it through, especially my finances. For me, it was a real shock going to university; you always hear about how poor students are, but I didn't realise how hard it would be to live away from my parents. I didn't realise the extent of extra bills such as rent, gas and electric, and trying to budget food was a nightmare!

I found myself lying to my parents about how much I was spending and by November of the first year, I had already spent my loan for that term. I decided to get a credit card.

I now have two credit cards with about £1,500 split between them both. I used to have a store card as well with £500 on it, but I have finally paid that off. However, I only managed it because of my overdraft. Every year the bank has allowed me to extend my overdraft to the limit, so it is sitting close to the maximum amount at £2,200 now.

The fact that bank and credit companies gave me credit and overdrafts so freely helped me get in the situation early on. But they are not entirely to blame and I wish I'd had some idea of managing finances before I went to uni. I've now got a debt of £3,700 (excluding student loan payments) and am on an average wage.

Gwenda's answer:

Oh, Jon. Less than eight weeks into your course and you had committed three of the cardinal sins of student life: the disappearing student loan; getting a credit card, nay, two credit cards to sort out your cash shortage; and keeping your debt problems to yourself.

It's never a good idea to lie to parents. If you had been upfront with them, yes, you probably would have got a monumental blasting, deservedly so, but they might well have bailed you out. Your pride might have been in tatters for a while, but that's surely a small price to pay compared with £3,700 of debt. If you couldn't face the parental wrath, why didn't you turn to your university? They have services – such as the Access to Learning fund – to help students through problems such as yours.

You ask what to do now? You don't seem very adept at handling money, so play it safe. Your student loan debt will look after itself, money being taken from your pay at source. Your bank should have a special overdraft payback scheme for graduates – use it. As to your credit-card debt, unless your bank can come up with an inexpensive solution, I suggest you get a second job (if you can find one) and work your way into solvency.