Student finance: a balanced equation

Most students get into debt, but a few simple budgeting sums can ensure things don’t get out of hand, says Amy McLellan

Budgeting: some are born to it, others have it thrust upon them as overdraft charges start to bite. The key is to get on top of things right from the beginning. Work out exactly what you’ve got coming in – student loan, any grants and bursaries, parental contribution – and then tot up your outgoings. As a rough guide you should budget between £6,500 and £7,500 per academic year to cover living costs such as rent, energy, food, clothes, books, transport and socialising. Most universities have online budget planners to get you started.

Remember the hidden costs of living

Do you know how much a load of laundry costs to wash and dry? What about a TV licence? Make sure your budget includes insurance too: student digs can be targeted by opportunistic criminals.

Think long term

Don’t get carried away when your student loan hits your bank account. The first few weeks of term will quickly make a dent in the lump sum as rent gets paid, book lists arrive and a round of giddy socialising begins. “It looks like a lot of money when you get it in September but it has to last until January,” warns Barbara Wooden, senior welfare adviser at Northumbria University.

Spend wisely

Shop with friends to share the costs of common items such as cooking oil, salt and loo roll and steer clear of expensive brands: go for supermarket value ranges. Learn to cook, too: frequent takeaways add to your waistline and quickly subtract from your bank account. Make good use of college and public libraries rather than buying books; if you have to make purchases, go down the second-hand route.

Stay informed

Make sure you know what’s going in and out of your bank account to avoid nasty surprises. “Students don’t live a nine-to-five lifestyle so register for internet and telephone banking so you can get access to your accounts at times that suit you,” says Catherine McGrath, director of current accounts at Lloyds TSB.

Ditch the car

From petrol to insurance, it’s a crippling expense. Most student accommodation is within walking or cycling distance of the main campus and even those further afield can take advantage of discounted student travel on buses and trains.

Make a little extra

Most students end up working part-time to supplement their income. Most jobs are minimum wage but look out for better paying opportunities: some universities pay £10 an hour for students willing to take on admin or ambassadorial roles, while private tuition can pay even more. The recommended maximum is 16 hours a week.

Don’t struggle in silence

If your debts are getting out of control, speak to your university student-finance advisers. They will be able to help with budgeting.

Fantastic financial advice that won’t cost a penny

“I’m a bit of a geek, so I used an Excel spreadsheet to keep track of my money. I knew what I had to pay for and I’d put that money to one side so I couldn’t touch it. You have to learn how to be strict with yourself and work out your own system.” Victoria McBride, 23, graduate of Lancaster University

“Keep an eye out for money-saving incentives. Many retailers offer discounts on student essentials such as books, music and computer equipment. Students have limited money to spend, so it makes sense to take advantage of as many of these incentives as possible to make your money last longer.” Lucy Payne, youth manager, HSBC

“If you live in private accommodation, make sure you pay utility bills monthly rather than quarterly: it’s easier to manage that way. Also, make sure all the tenants’ names are on the bill, not just yours.” Barbara Wooden, senior welfare adviser, Northumbria University

“Get advice on all your entitlements, such as bursaries, welfare benefits, childcare grants and disability allowances. Check out the Educational Grants Advisory Service to find out what is on offer.” Meg Vickers, Manchester Metropolitan University student union

“Most universities have underspent on their bursaries because students are not taking up all the money that they’re entitled to. Most bursaries are £500 to £1,000, which might not seem a lot, but can go a long way in the student world.” Claire Evenden, student finance adviser, University of Greenwich

“Keep track of your money by signing up for free text alerts that tell you what your balance is and let you know when you are about to go into unplanned overdraft. When you’re having a fantastic time, it can be easy to lose track of how much you are spending.” Catherine McGrath, director of current accounts, Lloyds TSB

“It’s really helpful to get a part-time job so you’ve got a little bit of spending money. I had two jobs and the hours were flexible. That extra money made a real difference in the first year, which turned out to be a bit of a struggle.” Laura Stanley, second year student, Greenwich University

“Don’t go to the cashpoint every day. Try to allocate a certain amount of cash to last all week and then stick to it. When you do use cashpoints, make sure they don’t charge a handling fee.” Tricia Joyce, student financial support officer, Manchester Metropolitan University