Making your money stretch further — a concept most students are painfully familiar with after embarking on university life. But were we ever aware during our school years of just how important it would come to be?
Not so much, according to recent findings. The latest Student Money Survey shows almost three-quarters of students (70%) wish they’d had a better financial education, suggesting a similar proportion may lack basic money management skills when starting out at university.
Another study from 2017 estimated that just 40% of schools were delivering financial education. And a lack of guidance from parents could be exacerbating the problem, leaving young people unprepared for the challenge of budgeting at university and beyond.
“Financial capability is an essential life skill and a lack of financial education can affect nearly every aspect of a young person’s life, from their mental wellbeing to their performance at work and even their personal health,” explains Russell Winnard, head of programmes and services at Young Money.
“Going to university can be the first experience many young people have of living independently. The need to manage their money effectively is vital as they take on the responsibility of paying utility bills and budgeting for their spending,” he adds.
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Whether you’re about to start uni or you need to reign in your spending for the new term ahead, there are a range tools and techniques designed to help ease the financial journey:
· Track your spending with an app — these are handy for making you more aware when parting with your cash. Contactless is great, but it does make it all too easy to lose track of your outgoings, especially on a night out. Using an app that gets you to manually input your spending is even better than one that’s automatically linked to your bank account.
· Earn a little extra — if your course schedule allows for a part-time job during term-time, taking on a few hours can make a big difference. Or perhaps you could find some work during the holidays to build up some extra cash. If a job isn’t feasible, there are other ways to boost your cash flow — Save the Student offers good tips.
· Share and save — rather than having 101 different bills to work out among your housemates, use a service that combines utilities into one shared monthly payment — potentially saving you money in the process.
· Cash in hand — an alternative to tracking payments with an app is to get into the habit of using good old-fashioned cash. That way you can take out a set amount for the week and ensure you don’t spend more than that.
· Ask for help when you need it — money is a source of stress and anxiety for many students, so most universities will have a student money adviser or support services available to help you with budgeting techniques and ensure you can access any financial options that you might be entitled to.
· Keep it real — it might be tempting to ‘live for the moment’, but remembering that you can only spend what you have is as essential for your mental health as it is for your bank balance. Using a budget calculator like the one provided by UCAS can be hugely helpful.
“Most students expect to feel hard up to an extent, but with the cost of university at an all-time high, the ability to be smart with what little money they have is so important — and yet many schools are failing to prepare young people with this basic skill,” explains Ashley Tate, chief executive officer at online student bill-sharing tool Split the Bills.
“Fortunately, until financial education is a compulsory part of the curriculum, there is still plenty of advice available — for current and prospective students, but also for parents,” he adds.
Since instant financial stability is unlikely once university is behind you and the world of work awaits, it’s important to retain your budgeting skills, even if you’re able to take advantage of your parents’ generosity. Recent research showed that more than half of over-18s who return to live at home after finishing their education enjoy rent-free living, while the remaining 45% pay £194 per month on average.
“Maintaining the budgeting skills you learn at university is important to take you through the rest of your life,” Ashley adds. “If you’re able to benefit from not paying rent for a while after you graduate, take the opportunity to put some money aside in a high-interest savings account to safeguard your future.”