School leavers may be excited about their rapidly approaching university career, but are they prepared for the financial aspects of leaving home? Moneyfacts.co.uk has compiled some top tips to help students embellish their education with good financial management.
Big banks don’t waste much time when targeting potential students, enticing them with an array of free gifts such as cinema tickets, gadgets and discounted CDs, but there are more important things to consider which will be more valuable in the long run.
Lisa Taylor, analyst at Moneyfacts.co.uk, recommends looking for a student bank account that provides a competitive overdraft, one which allows you time after you graduate to pay it off without charging interest. It is also a good idea, she says, to consider the location of your bank with regards to where you will be living, because it can be useful to pop into a branch and have a chat with the student advisor.
Budgeting should be a key aspect of your university life, to make sure you can afford things like socialising in addition to essentials such as rent, books and utilities. Saving some money by finding summer or part-time work can help to boost your finances and get you off to a good start, especially if you find a savings account with a high rate of interest.
Student loans only go so far, so it is important not to use them frivolously, as you could find yourself struggling to pay for necessary basics by the end of term. This will also avoid any phone-calls home, begging for a loan from the bank of mum and dad, Moneysupermarket advises.
Credit cards should be taken out with caution, as even a small debt can take considerable time to pay off when you don’t have an income. “If you do choose to take a credit card,” says Lisa, “use it to get the most competitive deals online, when travelling or in case of emergency – but don’t spend on it what you don’t have.”
Taking out proper insurance, keeping an eye on your bank account and checking you credit report for signs of identity fraud are also important things to consider when you’re heading off to university.
Learn more about managing student money