How to deal with your student loan
Now that you are at university started your course and received your student loan you are officially a student! Well done! The next bit is surviving the course, passing with a decent grade and to not get yourself in a heap of debt by graduation day, make sure that you have your student loans explained to you before you start. We can help you on the financial side with ways on how to deal with your student loan and what to do when you get it.
You’re going to hear this word a lot throughout your three years, from your financial advisor at university, your parents and anything else which is in anyway related to money. Yes, you’re going to sick of it. However, the word fits the purpose and one of the key aspects of keeping yourself financially afloat during your degree – budgeting. You should use a budget calculator – which are available online or make one yourself in a document on a spreadsheet – to see what your outgoings and incomings are. When you use this budget calculator remember to be realistic, because writing down that you will only spend £10 each week on leisure activities/miscellaneous when you know it will be more like £60 won’t help you when it comes to the end of the month. When you are entering all of your values and working out how much you spend and where round up the figure or allow some room for you to over. Especially if this is your first time living on your own because you’re not going to know what it is like yet. Be smart, there are always things to spend your money on, but there are also things that you shouldn’t do with your student loan. Student budgeting is one of the smartest moves you will ever make.
Check your balance
Ideally, you should know what you have in your account and how much you can spend when at university, but during Freshers’ week and the hype of student loan week, you might go a little overboard with the spending. So, by checking your balance every day you can see how much you actually spent the day before, instead of reaching the end of Freshers and then realise that you have no money – trust us, it’s not a good feeling! After Freshers’ set yourself a target of how much you can spend each week, and then check your balance at the end of each week or add up all of the receipts to see if you’re still on track and in the black. Make sure that you also check in with the Student Loans Company from time-to-time, too.
Set up direct debits
It is easier to keep an eye on your bills and your credit score if you have direct debits and standing orders. These bills are paid automatically from your bank account, so you don’t have to worry about remembering to pay them on time, or have to call up or visit your bank. Although, it is best to bear in mind that once you have set up these automated bills they will come out of your account, and if you don’t have enough money to pay them you may be charged by your provider and your bank account. You can check the terms and conditions of your bank account, or cancel a direct debit before it is due if you know you won’t be able to pay it to avoid bank charges. However, cancelling or not paying a bill will reflect on your credit score and depending on what bill it is, it might cost you too. Watch your spending and guarantee you’ll be able to pay your bills each month. If you’re going to do this, make sure you know what the best student bank account for you is. Be aware as well, that there is a difference between student debit cards and student credit cards.
Give yourself a daily spend
It might seem silly, but when you know how much you can spend each day, you can hopefully stop yourself from overspending. If you give yourself a daily spend of £5.00, and that can be for lunch (check out a healthy eating guide, to see if you can kill two birds with one stone and save money AND stay healthy, too) or anything that you want, if you spend over or under you can add it up and adjust it throughout the week. And if you want to go out at the end of the week with your friends, you can save up your money from previous days to be able to have a good time on Friday! It is easy to say to yourself that you’ll spend less tomorrow, but in real life that doesn’t happen, but if you allow yourself a small amount every day you’ll be able to buy the things you want but just in proportions.
Allocate and divide
Your budget calculator will make this part much, much easier! Allocate specific amounts of money for each part of your finances, such as bills, travel, rent, leisure and food. Take away the big amounts like rent, travel and shopping, and then you can see how much you have left for yourself. If you want to be extra responsible you could put the money allocated for the next two months into another bank account or to your friends or family to stop yourself from overspending!
Learning how to budget and to act responsibly when it comes to finances it is a difficult thing to master, but if you follow the rules, you’ll be able to stay in the black and survive university.