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Student finance basics and ways to cut costs at university

·Personal Finance Columnist
·6-min read
student finance Anna Austin (centre-right) reacts when reading their A-level results at Norwich School, Norwich. Picture date: Thursday August 18, 2022. (Photo by Joe Giddens/PA Images via Getty Images)
It’s tempting to think that once you've passed your A-Levels and got into university, the hard work is done. But, with prices rising so alarmingly, it's worth getting to grips with the student finance basics. Photo by Joe Giddens/PA Images via Getty

It’s tempting to think that once you've passed your A-Levels and got into university, the hard work is done. However, with prices rising so alarmingly, it's worth arming yourself with all the money tips you need to make the best start in your adult life.

With the start of the university year approaching, you still have a few weeks to get the student finance basics sorted.

Here are seven money basics all students should be aware of:

1. Move money from your maintenance loan out of your account on day one

If you get this loan, you’ll be paid in just three instalments each year, so there’s a real risk of accidental overspending.

Some people immediately transfer enough money for bills and rent into a separate account, so they’re never tempted to dip into cash meant for the essentials.

2. Face the boredom of a budget

It may feel like a chore, but take the time to complete a budget planner, so you can plan for everything you need to spend.

Read more: The most and least affordable cities for students in the UK revealed

It’s incredibly difficult to know what costs you will face when you’re starting out, which is where some help from parents can come in handy.

3. Understand your overdraft

It’s worth picking an account with as big a 0% overdraft as possible.

However, you need to be really clear what this is for.

Don’t put it in the same bracket as your student loan, and don’t think of this as money you can spend on whatever you like.

This is for essential purchases if your budgeting goes wrong — and you can never afford to go over your agreed limit.

When you graduate, you’ll have to pay it off as quickly as possible or you’ll end up being charged sky-high interest rates — so this money isn’t free forever.

Young adult African American female consumer holding credit card and smartphone sitting on floor at home doing online banking transaction. E commerce virtual shopping, secure mobile banking concept.
Be careful with credit cards — if you’re not paying it off, you’ll be racking up major interest charges. Photo: Getty

4. Be careful about credit cards

Your bank may well try to sell you one, and the minimum repayments will make it look like an easy way to afford what you want.

However, if you’re not paying it off, you’ll be racking up major interest charges, and it will all have to be paid back eventually.

If you’re not earning, this is going to give you a real mountain to climb.

5. Dodge store cards

They’re horrendously expensive, and even if you sign up to one for a discount, you can easily be tempted to spend more than you can afford on things you don’t need.

6. Take buy-now-pay-later seriously.

It might feel like a free way to spread the cost, but it’s debt.

If you use it, you need to understand exactly how much you’re borrowing, and the total of all your repayments.

Read more: Energy bills: How to cope with soaring prices

You also need to appreciate the consequences of missing payments — which in some cases will go on your credit record.

Like with any debt, think before you buy. If you don’t really need it right now, you shouldn’t be borrowing to pay for it.

7. Don’t forget tax

Check your council tax bill — students don’t have to pay, so if you’re a full-time student living with other students, you shouldn’t have to pay any council tax at all.

If you’re working, make sure you’re paying the right income tax too. If you’re earning less than £12,570 a year, you shouldn’t be paying it, so check your payslip.

Young woman sitting  with a book, laptok in the library and taking learning notes. Concept of education, library, students.
With the start of the university year approaching, you still have a few weeks to get the student finance basics sorted. Photo: Getty

10 ways to cut your costs as prices rise

1. Make sure you sign up for everything you need, and nothing you don’t.

If you’re covering your mobile phone bill, broadband and media packages for the first time, think carefully about what you need.

Don’t let the salesperson foist extra services on you, but don’t scrimp either because when it comes to your mobile, going over your allowances is expensive.

2. Get student discounts

Sign up to sites like Unidays and Student Beans for online discounts.

Then ask in store and check any website whenever you buy. A huge number of brands offer cheaper deals for students — including Apple (AAPL), Amazon (AMZN) and Spotify (SPOT).

3. Consider investing in discount cards

Among the most valuable are the NUS Extra Card and the Young Persons Railcard.

Some parents send their kids to university with both, and right now you can buy the railcard, which gives you a third off rail fares, with just £10 of Tesco (TSCO.L) Clubcard Points.

4. Take advantages of freebies

One of the best is Microsoft (MSFT) software, which is free for students.

But there are also lots of online communities dedicated to tracking down free stuff and letting people know about it — from Money Saving Expert to Save the Student, and HotUKDeals.

Friends are preparing food for a dinner party at home.
Nights out are expensive, so plan regular evenings in with your friends. Photo: Getty

5. Build cheap or free habits with your friends

Nights out are hugely expensive, so rather than feeling you need to spend in order to see your friends, plan regular evenings in together or free activities.

6. Learn to cook before you go

Learn at least a few dishes. It’s by far the cheapest way to feed yourself.

7. Sign up for supermarket reward cards

These offer points and some big discounts. When it comes to spending the points, you might need the money off your supermarket shopping, but if you spend with "partners" you can get up to three times as much value.

8. Don’t be wedded to premium brands

And don’t just buy what your parents do. Supermarket own brands and budget ranges are a fraction of the price.

9. Shop for food in the evening

Check when your local supermarket puts out the yellow sticker bargains, when prices are slashed to clear.

10. Sign up to toogoodtogo.co.uk

You can get "magic bags" of food for a fraction of the full price at the end of the day with this site.

Use it carefully though. There are plenty of grocery stores on the list which can offer brilliant bargains, but there are also sandwich shops, and it’s still cheaper to make your own.

Watch: How to live off a student loan