Student Survival Guide: Summing up your finances

While it’s kind to be generous, it’s foolish to spend cash you don’t have

As you are no doubt aware, students often run up significant debts. The stereotype of baked bean-eating, voucher-collecting cheapskates often holds true (sorry to say it).

There are good reasons for this. Part of the problem is that, for many students, this is their first taste of financial independence. While a few approach this freedom sensibly and maturely, planning a budget and sticking to it, saving up before term starts, watching the pennies and letting the pounds take care of themselves, most of you (yes, you), go mad.

Is it your round? What the hell: it’s freshers’ week! You have a big cheque from the Student Loans Company and loads of friends to buy for. And you’ve got to look good, right? Sure. And what finer way than to hit the shops every time you have an afternoon “off” (note: this should be spent in the library).

A cycle starts that’s hard to break. So while we don’t want to kill your fun and certainly not curb your popularity, we’d have trouble sleeping at night if we didn’t say: work out a budget. Stick to it. Get your NUS Extra card (www.nus.org.uk/NUS-Extra). Shop wisely (which means getting fruit and veg from your local market and the occasional item of clothing from a charity shop).

Basically, remember the money you’re borrowing isn’t entirely free. You will have to pay it back. And banks can be harsh, unforgiving places. Keep your bank manager onside and spend your (parents’?) money wisely.

“I’ve been very bad at budgeting,” admits Gabriel Baker, a student at Middlesex University. “I went a bit crazy because you get excited about having your own money and being able to spend it as you like. I got into a bit of trouble. Then my friend gave me a spreadsheet she’d got from the UCAS website. That’s been helpful. Now, I just need to stick to it!”

THIS YEAR'S ACCOUNTS

BARCLAYS (Student Additions account)

Overdrafts: Automatic £200 interest-free overdraft. Interest-free overdraft limits (available on request) of up to £1,000 in year 1, £1,250 in year 2, £1,500 in year 3, £1,750 in year 4, and £2,000 in year 5. Option to extend you overdraft to £3,000 at 8.9 per cent AER.

Access: Connect card with daily cash-machine withdrawal limit of £300. Online and telephone banking.

LLOYDS (Early Student Account, available to those planning to start in higher education in 2009)

Overdrafts: Automatic £200 interest-free overdraft. Students may be able to arrange extended interest-free overdrafts on request.

Access: Free mobile banking until August 2010 (£2.50 a month after that), which enables you to keep an eye on your finances with free text alerts. Visa debit card, with the option to sign up for Save the Change, which helps you save every time you use your Visa debit card. Online and telephone banking.

Extras and freebies: Mobile phone top-up facility for pay-as-you-go phones at most Lloyds TSB cashpoints. Commission-free foreign currency and non-sterling American Express Travellers Cheques. Save up to £75.99 with the AA. Free YHA membership for a year. And 35 free music downloads.

NATWEST (Student Current Account)

Overdraft: An interest-free overdraft up to £1,250 in year 1, £1,400 in year 2, £1,600 in year 3, £1,800 in year 4 and £2,000 in year 5.

Access: A student credit card, with a credit limit of up to £500. Mobile phone banking. An international debit card.

Extras and freebies: A free five-year 16-25 Railcard worth £130 (which entitles you to a third off rail fares, plus discounts at a range of shops and restaurants). A free 4GB USB memory stick when you apply online (while stocks last!) More campus branches than any other UK bank. Mobile phone top-ups at cash machines. Virtually paperless banking.

CO-OPERATIVE BANK (Student Account)

Overdraft: A £1,400 interest-free overdraft in year 1, rising to £2,000 in year 3.

Access: Debit card. Cheque book. A £100 cheque guarantee card. Online and telephone banking.

ABBEY (Student Account)

Overdraft: Interest-free overdraft of up to £2,000 (£1,000 in year 1).

Access: Visa debit or Electron card. Online banking.

Extras and freebies: A £50 cash gift credited to the account after it has been opened for one month. Two per cent AER on balances up to £500. Once you have opened your account, you will be eligible to enter the prize draw for a master class with a celebrity.