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10 financial facts all students need to know

Felicity Hannah
Students arriving for Manchester University's freshers week queue up at a cash machine (Photo: Christopher Furlong/Getty Images)

If you are just weeks away from starting university then there’s a lot to think about. What books will you need? Have you sorted accommodation and is it right for you? What should you pack and who will you miss?

Your finances are a genuinely important thing to get right too. Go into uni with the right money attitude and you’re much more likely to graduate in good financial shape.

But it’s not always obvious or easy, especially if you’re leaving home for the first time. The good news is that if you spend even a small amount of time planning and thinking about your finances before you start uni, you’ll be in a better position than a lot of people both during your studies and afterwards.

You hopefully already know about your student loan and how much you’ll get to support yourself on – as well as how you repay that money later (currently 9 per cent of your salary once you’re earning over £25,725 a year in England and Wales).

So, here are 10 more practical things that you need to know. Take the time to read and consider and plan, it’ll definitely pay.

1. You need budgeting skills

The first thing to do, the very first thing, before finding the student union or even packing your bags is to understand your budget.

How much will you have to get you through each term? How does that break down week by week? What are your bills? What income will you have beyond your student loan? How much actual free cash will you have to spend on going out?

This is the single most empowering thing you can do for your finances because it puts you in control. There are online guides, spreadsheets and even apps that will help you with this.

It really is the difference between managing your money smoothly over the year and ending up in real difficulties because you didn’t. Even if you disregard the rest of this article, understanding and sticking to a budget could transform your student finances.

2. You shouldn’t have to pay taxes (assuming you’re not overworking!)

How many hours are you planning to work? Students are not exempt from taxes, they are liable for income tax and national insurance just like anyone else.

But the good news is that all workers are allowed to earn a certain amount without paying taxes.

The current personal allowance is £12,500, so as long as you’re earning less than that across a tax year then you shouldn’t have to pay taxes.

Most universities recommend students don’t work more than 15 hours a week, so many students earn less than the threshold and don’t have to pay taxes or get a refund on them.

3. You can get a railcard

If you’re going to travel home a lot then it’s really worth investing in a 16-25 Railcard. It costs £30 a year or £70 for three years (money-saving tip right there) and you may be able to get one if you’re a mature student too.

With this card you can get discounts of a third on the price of railway travel across the UK. If you’re travelling a long way then you could save the cost of the card back in just one journey.

4. You need contents insurance. You really do

I know, you think you need another bill like you need a hole in the head. But the National Union of Students says one in five students fall victim to crime while studying at college or university and the average cost of a break-in standing at £900 to repair the damage and replace belongings.

Don’t panic about the risk and let it spoil your excitement. Do make sure you’re protected with a decent contents insurance policy just in case it does.

5. That (financial) knowledge is (financial) power

It’s really easy to let financial control slip during university – there are so many distractions. But if you can get in the habit of regularly checking your bank balance you will be much better off.

Knowing how much cash you have and what the state of your overdraft is will be key to your financial health throughout your course.

6. You shouldn’t just bank with the branch on campus

Most banks offer a student account but it’s tempting to simply pick whichever one has a branch on or near campus.

But taking the time to find the right account for your particular needs is essential and thanks to apps and internet banking it’s not as urgent for most to have immediate access to a branch.

A bit of time spent assessing which is the right account for you will really help you manage your money throughout your studies. If you need to use an overdraft then make sure you look for the account with the cheapest one. But if you can budget without an overdraft then it is far better to do so.

Nationwide and Santander offer the best accounts for students right now, according to analysis by Which? But it’s worth spending some time assessing which account is right for you and what you need.

7. You have rights when renting

Although you’re probably in official university accommodation for the first year, after that you may end up in the private rented sector.

It’s so important to know your financial rights when you do that so you don’t end up being ripped off.

Letting agents and landlords can’t charge upfront fees anymore, so if any try to then you should be extremely suspicious. And your landlord should be placing your deposit within an official deposit protection scheme, meaning they can’t just arbitrarily keep it.

Some student accommodation will be let with bills included but a lot of rented flats and rooms won’t. If bills aren’t included then you need to proactively sort out your various contracts from gas and electricity, to council tax and broadband.

Make sure your flatmates all understand any shared commitments so they can be budgeted for properly.

8. Register to vote

Not only will registering to vote ensure that you can participate in any upcoming elections – particularly important given how many people are predicting an early general election – it will also help your finances.

Being on the electoral roll will boost your credit score as it confirms your address and makes you a safer person to lend to. That’s not just for casual debt, which you should avoid if you can.

It can also help you qualify for car insurance, mobile phone contracts and more, so it’s really worth doing. It only takes a moment, too – this is one of the easiest wins in this whole article.

9. Help is available

Lots of undergraduates find themselves in difficulties, so if you do find yourself struggling financially then you are not alone.

Getting help can be the difference between graduating with money problems and graduating with your finances are under control.

If you are struggling, if it is causing you anxiety, if it is distracting you from your studies and affecting your mental health then get some help. Talk to your bank, they will be used to helping people like you. Talk to whatever student support your university offers.

You may be able to talk to a student money adviser, check out the National Association of Student Money Advisers (NASMA) website to find one.

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10. University is more fun if you’re in control

Taking time to plan your finances before Freshers’ Week may not be as exciting as packing. But money worries can cause stress and anxiety, which can wreck your undergrad experience.

Deciding to be financial sensible during your undergrad years will reduce your worries and mean you have more fun.

That may mean staying in a few nights when your friends are out burning a hole into their overdrafts but you’ll be in better shape by the end of your degree – and less stressed during your studies.

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