How to Plan your Student Finance
- November 16, 2018
- by Suliman
How to Plan your Student Finance
Are you starting or returning to university this September? Planning your finances correctly is essential to having an overall great experience. We will look at how to manage the money situation without taking on additional stress that comes from bad planning and decisions.
Whether you are studying from home or living away from home, your university journey will require much more financially independent choices. We’ll help you make the right ones. Many companies will offer you a whole variety of specialised accounts, cards and other financial incentives. These products and services aren’t the most interesting topic to discuss but good decisions will lead to additional balance and freedom.
Creating a budget
Planning and following an income and expenditure sheet will ensure you are not spending more than your income each month. This will help you manage your budget for each month or term.
Think about what your priority expenditure consists of and give yourself some disposable income for personal or social endeavours. Remember to have an emergency fund to give you some breathing room. Avoid unnecessary expensive items that you can live without.
Student loans, bursaries and grants
Students have the option to take out student loans to help them pay for university fees and the associated living costs. It is important to understand how these loans work.
Higher education courses will generally cost just over £9,000 per year, these will be paid directly to your place of study, whether it’s a college or university. You may also have access to a maintenance loan, usually up to around £11,000 per year, this will help you cover your living costs.
This amount is based on where you are located within the country and if you are living at home or away from home. Right now, you only have to start making repayments to your student loan once you are earning £21,000+ per year.
Student bank accounts
Banks will offer their own incentives to convince you to choose them, they will hope that you continue as a customer with them for the rest of your life. Look for interest free overdrafts or other helpful extras like an NUS Extra card or a student rail card.
We recommend comparing what each bank can offer you and choose what features and perks will be most helpful to you while studying.
Student credit cards
It would be better to avoid credit cards if you can manage without them. Credit card debt can increase if you’re not careful and if you’re on a course that lasts 3 or more years, this may make the situation difficult later on.
If you can manage them responsibly and can exercise self-control, they do have their benefits. For example, you can get additional protection on the purchase of goods and services. Other benefits include, lower interest rates over a shorter time period and access to additional funds in an emergency.
Avoid these unless you require them for something specific and have a plan in place to repay them as soon as possible.
The amount owed will only increase with the added interest. Stay away from payday loans, they have extremely high interest rates and are unsustainable if you cannot pay them very quickly.
Contents insurance can protect you from damage, loss or theft. Compare contents insurance policies to ensure you’re getting the best value, check the policy terms and conditions so you know what exclusions and restrictions will apply.
If you are renting, you will not need buildings cover, the landlord will be responsible for this.
Student employment and tax
If you’re able to find a flexible part time job whilst in higher education, this can help your financial situation. Try to find a balance between the time you spend recreationally, working, and most importantly studying. You’re only required to contribute towards tax and national insurance if your income exceeds the following:
Earning more than £958 per month for tax
Earning more than £157 per week for national insurance
Most of your bills will likely be included within your rent if you are residing in halls of residence. Some bills may be included within your rent for student houses, check with your landlord. This should make budgeting easier.
If some bills are not included within your rent and you’re living with other students or tenants in a private property, calculate how these bills will be divided beforehand to avoid any disputes later on.
You will have to pay for gas, electricity and water if it isn’t already included within your accommodation rent. Use a smart meter reading to make sure you’re not paying for more than your usage.
Internet, telephone and TV
Have a look for student tailored services, even if they sometimes cost more per month, the savings may be worth it if you’re able to agree to a 9 month contract rather than a 12 or 18 month contract.
This will mean that you won’t have to pay for usage for a period you’re not in the residence.
If you watch live TV, whether it’s on a television, laptop, tablet, or mobile phone, you will have to pay a TV license.
If you live away from home, you will need your own separate license. You will only require one license if you are living in shared accommodation as this will cover the whole property. You can get a refund for the period you are not in the accommodation e.g. during summer break.
If you and everyone else within the property are full-time students, you will be exempt from paying council tax.
It is very important that you apply for this council tax exemption. You can do this by requesting an exemption letter from your higher education institution and present this to the local council, alternatively, you can also apply online.