... So Being Financially Prepared Is Crucial
As of March 2019, students in the UK owed £121 billion on their student loans. This number is set to rise substantially over the coming years, with the government anticipating student loan debt to peak at £450 billion by 2050. With this in mind, it makes sense to have a solid financial plan in place before you head to university, to prevent yourself from becoming another victim of the country’s student debt crisis.
Prepare for the unexpected
It’s a myth that your student loan will cover the entire cost of your course. A survey from Which found that students spend an average of £484 on a computer or laptop, £203 on travel to and from work placements, £158 on field trips, and £119 on textbooks out of their own pockets. You therefore need to have planned for additional expenses such as these.
One way to do this is to put a solid amount of cash into a high-interest savings account every month for a year before you head to university so that you can fall back on it as and when these unexpected expenses crop up.
Know your budget
36% of students don’t have any kind of budget in place, according to a Natwest study. This can be detrimental to your finances and can result in you graduating from university with sky-high debt - such as the 69 students that recently graduated owing more than £100,000. To avoid falling into debt or to turn your finances around when you have overspent, you should create a strict budget to stick to at all times. Make a list of your incomings, as well as the expenses you’ll encounter, such as travel costs, household bills, living expenses and even the cost of gifts for birthdays and Christmas. Set a figure against every item and ensure that you don’t spend more than that amount on it when you get to university.
Get job hunting
University students are often put off by the prospect of working while studying, fearing that it will impact their education, especially as research from Natwest shows that students spent 10 hours less per month studying in 2019 than they did in 2018. But the reality is that you’ll need a part-time role at the very least to keep your finances healthy throughout university. An Endsleigh study found that 77% of students work while at university, with average earnings coming in at £412 per month. As students in the UK spend an average of £807 per month, bagging yourself a job is a great way to keep your finances in great shape. Ideally, start job hunting a few months before you start university as you’ll be up against fewer candidates and are more likely to get a role in your desired sector.
There’s no denying that university is an expensive experience. But by being financially prepared for the expenses you’ll face and having a solid plan in place, you’ll find that your time in higher education will be easier than you expected and that your finances will benefit in the long run.