Student Money Guide

Whilst most of us will have left school with a pretty good grounding in biology, history and English, one of the areas that many school leavers have been given no education at all, is personal finance.

This important area has long been neglected, and with personal finance getting more complex, there is a big push to get financial literacy on the curriculum from an early age.

Getting to grips with your finances can really mean the difference between just floating or really swimming on your course, and with many students each year citing financial difficulties as one of the reasons for failing or dropping off their course it is never too late to get to get money wise.

Budgeting

The starting point for budgeting is to work out what you have coming in. This might seem like stating the obvious, but when was the last time you sat down and spent 30 minutes looking at your personal budget? And there is little point doing this only once a year – it needs to be regularly reviewed to take into account changes in your lifestyle and larger one-off outgoings.

If you start the month by looking at your income and expected outgoings then there are less likely to be any surprises towards the end of month. You will be better able to see where there may be shortfalls and plan accordingly.

There are some great budgeting tools which can be reviewed on a regular basis and they are comprehensive enough to take into account irregular spending, such as computer hardware, course books, etc.

Try using the budgets on the Money Saving Expert website, and choose one that most fits you and your family’s circumstances.

Once you have done a comprehensive budget, check your bank balance regularly. The easiest way to do this is with online banking or by using text alerts.

Do I need to get a job?

Think carefully – there are many benefits to getting a part-time job whilst at university, the biggest being that you’ll get some money out of it. And if you choose the right kind of job, for example working as a health care assistant, it could also enhance your learning experience at university. But it’s important to remember why you are at university – to get a good degree or diploma, in order to get a good job.

If you do decide you need to work – and many students do find it is inevitable – make sure you get the work/study balance right. If you are still really struggling, speak to your tutor and consider applying to the University Hardship Funds.

Outgoings

There is no doubt that making your bursary, loan and income from part-time work cover your outgoings is getting increasingly difficult. With well publicised above inflation increases in basics such as rent and utilities it is even more important to make savings where you can.

The good news is that there are some great deals to be had. The RCN’s RCNXtra scheme can help with money saving ideas.

Read the regularly updated Money Saving Tips on the following pages, and email us your ideas.

RCNXtra, our online benefits scheme, can help you save money on everyday shopping essentials. Whether you need a laptop or cinema tickets, a new tablet or toaster, discover discounted prices from over 3000 top UK retailers.

Not only can you save money, you can also collect loyalty points (WOWPoints) every time you spend and redeem these against future purchases.

Our top student deals:

• Up to 55% off on cinema tickets at hundreds of cinemas across the UK
• 30% off HP laptops
• 20% off EE mobile contracts
• 20% off Virgin trains
• 20% off National Express
• Save up to 5% on the weekly shop, with a reloadable shopping card

Don’t keep these great deals you yourself! It’s really easy invite your friends and family to join the scheme too.

More fun for less

With all that studying, you need to reward yourself with some time off every now and then. At RCNXtra you’ll find discounts on package holidays, hotels, restaurants and reduced rate passes for theme parks.

Spend less – everyday

Are your energy bills too high? It takes just five minutes to compare your current energy spend and switch to a cheaper supplier with RCNXtra. You could save up to £166 and earn 2,000 WOWPoints plus earn £50 for referring your friend with First Utility*.

* Information correct at time of publishing.

Whether it is through student loans, bank loans or overdrafts, debt in one form or another is unavoidable for many students. The important thing to remember is that debt doesn’t necessarily have to mean stress.

By budgeting, managing your money sensibly and taking action before things like missed payments and unauthorised overdrafts get out of control, you can avoid getting into financial difficulty.

For a minority, however, there will be times when you simply feel that you just can’t cope with the financial pressures. This will undoubtedly impact on your ability to study, so it is important that as soon as you see major cracks in your finances you seek help.

If you have exhausted these options; and are still struggling – and you have found that your bank will not offer any further support – it is time to get expert debt advice.

Universities don’t want to see students drop off their courses. It doesn’t look good for the university and will ultimately affect its funding. So most universities will have welfare advisers onsite who are also experienced money advisers.

Check with your student union or university welfare services where you can access help and support.

If your university does not offer expert debt advice, use the RCN online Advice guides to find a Debt Adviser local to you.

Here is some basic advice about dealing with your creditors; but please don’t feel you have to do this all on your own. 

The first thing you need to do is decide whether you have a debt problem or a money management problem.

A money management problem is where your income is sufficient to cover both your debt repayments and your essential living costs but you spend too much on non-essential items. This can be addressed by following the budgeting steps outlined in previous sections.

A debt problem can be defined as a situation where you are unable to meet your monthly credit commitments, such as minimum credit card payments and meet all your essential living costs such as rent, travel, childcare.

What can I do if I don’t have enough left over to pay my contractual creditor payments in full?

If you have made sure that your income is as high as it can be, and your spending is at the minimum level you can realistically reduce it to, then the next step is to try to reduce your monthly creditor payments to a level that you can afford.

If you feel confident negotiating with your creditors yourself, then you will need to start by presenting them with your financial statement and showing how much you can afford to pay each creditor. This may only be token payments of £1 a month, or slightly more based on the percentage of how much you have left each month. This route is normally referred to as an informal agreement.

If you miss a contractual payment, it is important to realise that this will affect your credit rating. However, in most instances where an individual is insolvent it is likely that a credit rating will be affected.

However, you should always continue to pay your priority debt arrears (rent/mortgage, court fines, utilities, TV license, CCJs) before your unsecured debts (credit cards, personal loans, overdraft, store cards, catalogue debts). This is because failure to maintain priority debt repayments has much more severe consequences (including fines, loss of property and even imprisonment) than failure to maintain unsecured debts repayments.

An informal agreement with creditors is not always the only, or indeed the most effective way, of dealing with debts. 

There are other insolvency options that you should discuss with an experienced debt adviser. The option that suits your situation best will depend on factors such as the level of debt, the type of debt and in some situations your own personal preferences.

1. Try not to panic!
2. Work out a realistic budget using the tools outlined on this site.
3. Make sure you are getting all the income you are entitled to; and/or get a part-time job.
4. Speak to all your creditors and tell them you are seeking advice. Don’t get drawn into making payments you can’t afford at this stage.
5. Please remember that getting expert advice can really help you to decide on a suitable option for tackling the situation.