How to budget for college

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Determine what you need to cover living expenses, college expenses, and disposable income that allows you to have a reasonable social life. Photo: Getty

About half a million students will go to university for the first time in September. For many, it will be a baptism of fire in the world of spending and money management with the temptation to let loose after 18 months of pandemic restrictions.

The average undergraduate in England is now leaving college with debts of over £ 50,000, according to the Institute for Fiscal Studies, and this is increasing for people from poorer backgrounds due to their eligibility for more loans.

Understanding what funds are available, how to make your money last, and the practicalities of taking work while in school are key to keeping your debt from blowing up.

Get your loan

The first step is to know which loans you are entitled to. Most undergraduates are eligible for a full student loan to cover tuition costs up to a maximum of £ 9,250 per year, with 5.6% interest charged on top.

Loan repayments don’t start until April after graduation and only start if you earn more than £ 25,000. If you never earn more than this amount, you won’t have to repay the loan and any unpaid debt will be written off after 30 years.

Read more: How to Avoid Paying Too Much on Your Student Loan in the UK

Students can also apply for the means-tested maintenance loan. The amount to which you are entitled will depend on your household income, if you live at home and if you are outside London. The 2021/22 loan ranges from £ 3,516 to £ 12,382 per year depending on your situation.

The maintenance loan is unlikely to cover all of your living expenses such as accommodation, bills, food, transportation, and leisure activities. It is really important to look for grants, scholarships and scholarships. Contact the university’s student service center and find out what they have to offer.

Funding may also be available through Student Finance for things such as travel, disability, or dependents.

Bank wisely

Choosing a good student bank account will put you in a strong position from the start. Many banks will try to entice you with cash back and freebies offers, but the most important thing is the overdraft. On student accounts, this is interest-free, so even if you don’t use the money, it’s worth withdrawing it and putting it in a savings account, before paying it off and pocketing interest. .

And remember, you can switch bank accounts while you’re in college, but make sure you know if you can transfer your overdraft as well.

It may be a good idea to put your maintenance loan in a savings account and set up a direct debit from a checking account to pay you a weekly or monthly amount. This way, you are less likely to blow your budget before the end of the year.

Get down to work

Earning money in college is now the norm rather than the exception, with 61% of students saying the maintenance loan is not enough to live on. Depending on where you are and the number of students in the area, finding a part-time job may be your best option.

Be sure to check your class schedule in advance as college sessions can be scheduled up to 8 p.m. and try to find a job that can offer flexible hours around your classes.

Universities often employ student ambassadors to help out at open houses and other events, which can earn more than minimum wage, so it’s worth pursuing.

Another way to make money is to take online surveys or test products through sites like Swagbucks, YouGov, Prolific Academic, Ragdoll, and Proinsight. You can also earn vouchers through SnapMyEats by simply photographing the food receipts.

Have a plan

A Save the Student poll found that 71% of students wished they had a better financial education before going to college.

This can be a major cause of stress, so having a budget early on is essential. Determine what you need to cover living expenses, college expenses, and disposable income that allows you to have a reasonable social life.

Watch: How to live on a student loan

A simple calculation is to calculate your total income for a term in college, less your essential expenses (rent, food, bills, transportation, course materials) for the same period. Then divide that number by the number of weeks in a quarter. This is your weekly budget for non-essential expenses (take out, drinks, clothing, entertainment, travel).

For example, if your income in the first trimester is £ 3,000 and your essential expenses are £ 1,500, you would have disposable income of £ 125 per week, over a 12-week period.

Read more: How student debt can affect your mental health

Use a spreadsheet to record your income and expenses, and use apps like Starling Bank and Monzo that tag your purchases. These apps can send you notifications if you’re overspending and can also help you with particular savings jars. Apps like PayFriendz are also very useful for splitting bills and avoiding arguments.

Maximize discounts

Most major brands offer a 10% discount on clothing and merchandise, and restaurants often have loyalty programs and student deals. You can find the best prices and deals through apps like CheckoutSmart, Idealo, Vouchercloud and mySupermarket.

It is also worth investing in a youth rail pass, which can be free with a student bank account, as this will save you a third on the train journey, which will be useful for you. go home or visit friends.

And if you are moving into private accommodation, be sure to apply for a housing tax exemption and switch to a cheap energy supplier if possible. Learning to cook can also save you a fortune, as buying ingredients is much cheaper than buying ready meals or take out, especially if you use local markets.

For more tips, visit Savethestudent.org and Studentfinance.campaign.gov.uk.

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