I must be sending out mind bullets: one minute I’m
droning on imparting pearls of wisdom in the comments section of Students & money: who said this personal finance stuff was easy? – a post by Maria on The Money Principle. The next minute, an email from vouchercodes.co.uk comes zinging into my inbox, asking for my top five student money-saving tips for a Most Wanted: Student Survival Guide.
Well, I do have a few pieces of advice to share, but they aren’t the obvious ones. Often, the student money-saving tips that I read are all about flashing your NUS discount card to get 10 per cent off at TopShop, buying sensible food and going to cheapo student club nights. I think lots of students do these things though, whether or not they are struggling to make ends meet.
I certainly developed some spendthrifty habits in my early twenties, once I had graduated, but when I was a student I was insanely zealous about saving money. To the point where I don’t know if I should be happy or horrified at what I used to get up to. To be fair, much of it was due to necessity: I had (still have) a horror of debt, but was exactly rolling in it.
In many ways, I was lucky: I was at university in Central London, which was expensive, but time was on my side. Mine was the last year in which students did not have to pay tuition fees, and qualified for grants as well as loans. So even though my student days were a difficult time financially, they aren’t the same challenges faced by students in 2012. When I graduated I owed the Student Loans Company £1,605. This was a big deal to me at the time, and I paid it back as quickly as I could. But can you imagine graduating with just £1,605 of debt now? What a luxury!
To give you an idea of how I lived: at the time my household income was less than £17,000, which meant that I qualified for the full maintenance grant of around £4,000 a year. I also won a scholarship of £500 a year. By living in a hall of residence in a cheaper part of London and later, in a shared flat in which we turned the lounge into another bedroom to save on rent, the maintenance grant and scholarship just about covered my accommodation. My dad sent me £30.00 every week and that, along with earnings from part-time jobs, covered everything else, from food and clothes to books. My food budget was £15.00 per week, which seemed awfully hard back then, but amuses me now because I can now feed three of us on that amount if I have to.
My top five tips for saving money as a student are, I hope, as valid now as they were then. They are as follows:
1. Walk everywhere. Why spend money on transport to classes, when you can get yourself there and back for free? I lived a brisk hour’s walk from my university, and about an hour-and-a-half walk from my main term-time job. I had to get up earlier and pop my work shoes in my rucksack, but I loved trudging through London when it was quiet and still, and the city was just beginning to wake up and get going for the day. The streets are far more beautiful without the crowds.
2. Be wary of banks offering gifts. Banks offer various discounts and incentives such as cashback to those opening student bank accounts. But you are going to be a student for three years or more, so think longer term and opt for the bank with the lowest fees and the biggest interest-free overdraft facility. According to this Guardian piece, Halifax and HSBC come out on top with a £3,000 interest-free overdraft.
3. Never buy a book at full price, if you can help it. You can’t always help it, of course. But university textbooks can be prohibitively expensive, so never buy when you can beg, borrow or steal. (Well, maybe not that last one…) You may find used books on Amazon for less than £3, including postage. If you know in advance that a certain textbook is going to be required for your course, reserve it at the university library as early as possible. And don’t overlook second-hand bookshops, many of which carry items on the university reading list for a fraction of the price.
4. Bob-a-Job. Take on as much paid work as you can find and manage, both in term-time and in the holidays. As with textbooks, this can be a case of horses for courses: some degrees, like medicine, allow little time for anything other than study. And some universities, such as Oxford and Cambridge, actively discourage students from seeking work during term-time. However if you can, get out there and get job-hunting. I did data inputting, cleaning, filing and other admin work.
It’s true that in these straitened times, finding part-time work is more difficult than it was. There will always be vacancies for cleaners and carers, and this type of work can be easy to slot around a study schedule. Shops and supermarkets, for example, often employ cleaners for a couple of hours early in the morning or late at night. If you can’t find any vacancies advertised, hit the phones. Yes, it’s nervewracking, but in my experience it pays off – literally.
In the holidays, it was great to be in London because I would register with agencies and work as a temp secretary, covering other secretaries’ annual leave. I’d save up as much money as possible to help fund the following year’s study.
One great thing about working when you’re a student is that unless you earn more than £8,105 in a year, which is possible but unlikely if you are working a part-time student job, you don’t have to pay any tax or national insurance. So even if the jobs are menial, you can take home everything you earn – and the tax savings soon add up. Oh, how I hanker for those days.
5. Don’t let debt become anything other than a festering boil on your life. I’ve left the best until last, because I think this is the most important piece of advice I have to offer. And it seems particularly pertinent now, with tuition fees and living costs continuing to soar.
When everyone around you is living off giant loans – or they don’t have to live off giant loans and are instead spending like billy-o – it’s incredible how swiftly a debt-ridden lifestyle becomes normal. Suddenly, it isn’t such a big deal to up next year’s loan, to begin spending the next loan instalment before you get it or, even worse, to start racking up purchases on a student credit card. And this is when debt really begins to escalate.
Even now, more than 10 years after graduating, I have friends from that time who fell into that trap and who still haven’t finished paying off their student loans. Ugh. And the full whack of students loans then, for a three year course, amounted to less than £8,000! A fraction of the average student debt (£53,000) with which people are expected to graduate nowadays.
Let’s face it: unless you are from a well-to-do family background, it is unlikely that you are going to graduate debt-free*. But what you can do is ensure that every pound of that debt was necessary – and that every pound is paid back as quickly as possible. For that to happen, your attitude is just as important as your nose for a bargain.
What do you think? Are these tips realistic for students in 2012 – and what have I missed?
*Admittedly, I was at university with somebody who invested his full student loan in stocks and shares, and made a £15,000 profit in the first year. I’m not sure how likely that would be these days though!
Image credit: George Eastman House.