Me and my finances
Two years into her English degree, Lucy Tobin reveals how she is managing to stay out of debt
Published: 15 August 2007
Arriving at college to start my three years of university, I remember unloading stuffed suitcases and thinking that the lightest thing on board was my wallet. Two years on, my friends and I have discovered how to avoid the headline figures of students graduating with £15,000 debt via careful financing. Like most students, as a fresher I learnt as much about budgeting as I did about Byron - and now my friends and I are passing on our money-saving tips.
Most importantly, start thinking about your finances before you get to university. Luckily, I had sorted out my student account before I arrived at the fresher's fair, because otherwise I would have been lured by the big banks' stands offering freebies ranging from cash to Indian take-outs. Later in the term your choice of student account might make the difference between big nights out and boring nights in - so choose the account offering the biggest interest-free overdraft.
An overdraft might be worthwhile even if you don't plan on using it: one of my friends, whose gap year job means he stays in credit during term-time - earns money from his overdraft by investing it in a savings account. It's a great idea but does need careful planning. And watch out for imposed fees for 'unauthorised borrowing'. As a fresher, I joined the Oxford Union but forgot to transfer the £100-plus joining fee into my account: going into the red, I was stung with a hefty fee. It's always worth talking to your bank before paying up - in my case, they let me off the payment. Compare unauthorised spending fees and, if you do find yourself spending more than you expect, contact your bank before they get in touch with you.
For most students, the bulk of your cash will come from the Government-organised student loan. Registering with the organising company, Student Finance Direct, before you arrive at university will help you to budget in advance.
"I have found the best way to budget is to start by adding up all your termly earnings, including loans and money from jobs or family," says Meir Adler, 21, who is studying philosophy at Nottingham University. "Then subtract £200 - half for the extra expense of fresher's week, and half for emergencies - before taking away other fixed costs, like rent. Divide the rest by the number of weeks per term, then get down to the nitty gritty of spending on food, going out, travel... You might have to adjust it but it's a good place to start."
If you don't need your loan money immediately, don't leave it in your student account. "I decided to invest my loan into a unlimited-access ISA [Individual Saving Account] at the start of every year," says Georgia Lockwood Estrin, 21, who is studying neuroscience, also at Nottingham, "so it's earning money while I'm still in the black. I then use my overdraft to withdraw cash and buying things on my card, and, towards the end of term when I run out of money, I withdraw from my ISA."
You'll know you're a true student when your heart beats faster as you hear the word "freebie". Look out for big companies advertising on campus: their recruitment drives often include taking students out for meals. As long as you focus on your steak when the spiel starts, you'll have found a truly free lunch.
Another route to savings is your student discount card - ask about discounts everywhere you go, from cinema to supermarket, even shops like Topshop. Rebecca Burns, who is half-way through her degree in English and classics at Edinburgh University, recommends student entertainment: "Seek out student club nights, and restrict evenings out to bars with student deals and happy hours," she says.
I have halved my mobile bill by using online services like Skype to call home. My friends and I also use MSN and Facebook (all free) to arrange meetings. It's worth spending £20 on a Young Person's Railcard, or £10 on the coach equivalent, to cut down travelling costs. Imogen Hudson, 22, who studies illustration at Loughborough University, recommends walking or cycling. "It's healthier and free," she says. "I've also saved money this term by borrowing DVDs from the library for a cheap evening in."
Hudson advocates cooking with housemates: "It's less expensive, less is wasted and you have a more varied diet," she says. "I also make a packed lunch for library days to avoid wasting money on less healthy food in the canteen or union." Visiting the supermarket just before closing time can also provide good savings.
You soon get into the student mentality and learn how to live on the cheap. Although you might not want to go as far as one of my friends, who requests anonymity because, "my mum would go crazy if she found out! I take discarded food from the bins behind supermarkets. I'm not sure if it's allowed, but I get great food and it means I can spend more on booze..."
