7 minute read
uni finance survival 101 by joanne loney
from IMTAC Issue No. 07
by imtacmag
Uni Finance Survival 101
by Joanne Loney
Congratulations! You’ve finished your exams and received your university acceptance. It’s time to get ready for what is very likely the biggest change in your life so far. You get to decide what courses to take, which clubs to join and what to eat for dinner. You also decide how much money to spend and on what.
For many of us, university is the first time we’ve ever had to manage money ourselves, and most of us have received exactly zero financial education at school. In a recent survey by “Save the Student”, 74% of students say they wish they’d had a better financial education and 76% worry about having enough money to manage, which impacts on their grades, social life and mental health.
So, before you set out on your new adventure, here’s a quick Financial Survival Guide 101:
1. Have a realistic budget
This may sound boring but, trust me, unless you have unlimited access to funds, having control of your budget will reduce your stress levels enormously.
Very simply, a budget is:
• Your total income from all sources (family, loans, work etc)
• Minus your essential expenses (rent, bills, food, books etc)
• The surplus and that is what you can spend on non-essentials (going out, clothes, holidays, gym membership etc)
This become slightly more complicated as your income may be paid termly or yearly while your expenses are weekly or monthly and non-essentials are daily. This is why a budget is so important.
Here’s the math:
• Divide your income by how many months you will need it to last.
• Take aware your essential (fixed) monthly expenses.
• Divide what’s left by how many days or weeks or months you need it to last and that’s what you can spend on fun.
There are loads of budgeting apps available to help you with this
but as this is a huge subject and such an important life skill I’ll be covering this in more detail in my next article.
2. Open a bank account
A student bank account is similar to any other current account, but comes with some benefits tailored to people in higher education. You will need to have a student account unless you are piggy-backing off one of your parents’ accounts.
When choosing a bank and what account to open some things to think about are:
• Type of Account
Do you need a savings account (typically where you would earn some interest and have less access) as well as a current account (typically aligned to debit cards and standard orders for regular fixed payments).
• Physical or Virtual
If you would prefer to use cash to help keep to your budget do you need a wide branch network for access to ATMs (in some countries you will be charged for using another banks’
ATM). If not, very often the virtual banks have great budgeting apps.
• Local or Global
If you will be using this bank when you come home (or your family will be transferring money to your account) check what access you have here and in the country in which you’re studying.
• Charges
What are the charges? These can be per transaction or set annual fees or charges for overdrafts or loans. Again, this should be aligned to how you are going to use your account.
• Interest
Generally, student bank accounts don’t pay great interest but it’s worth checking. Particularly if you will be receiving a large amount of money at the beginning of the year and withdrawing it gradually through the year.
• Overdraft
Is there are a pre-agreed overdraft and what are the terms? Is any overdraft
“guaranteed” or “up to” (eligibility for the latter depends on a good credit record).
And please remember – this is not “free” money, you will need to pay it back. Only use an overdraft it you really need it. Your future self will thank you for this!
• Freebies
Banks love students as they hope we’ll stay with them for life once we graduate (and become earners!), so there may be lots of freebies on offer to open an account.
These can range from gifts, vouchers, discounts or cashback.
Don’t be dazzled by the glitter! There’s no point in opening an account for cashback if the charges are higher than an alternative bank and you end up giving it all back.
There are lots of sites you can visit that will give you an easy-to-use comparison of different banks in your new country. It’s worth doing your homework before you open an account rather than rushing into the one closest to your campus on the first day of term but, if you don’t, remember you can always change account later to a better offer if you keep a good credit history and watch those debts!
www.morethanacover.com
3. Watch out for store/credit/loyalty cards
Store/credit cards allow you to buy now and pay later. They will usually also have a “points” system where you get a certain number of points for every dollar/euro/ pound/etc that you spend and you can then spend these points as “cash” later.
When you use them properly, cards can be great. But you MUST pay off the full balance every month and DO NOT build up debt. For any balances that are not paid off each month you will be charged interest which is added to your debt which is then charged interest the next month. This will very quickly snowball and it can take years to pay off, taking a heavy toll on your mental health. I know it’s tempting and, honestly, don’t think I know anyone who hasn’t “accidentally” spent money they can’t afford on cards at some point in their life, but please learn from our mistakes!
4. Protect Yourself
Medical Insurance
Medical insurance is insurance which will cover your medical bills. Sometimes the insurance company will pay the doctor or hospital directly and sometimes you need to pay and then claim the money back.
This is becoming an essential in most countries, especially if National Health waiting lists are long.
Most of us will use our family/dependent insurance where we can, but there are lots of comparison websites available to help you choose if you need to. Do check if the country you are moving to has specific mandatory insurance (i.e. Switzerland) and that any family insurance will cover you wherever you are going.
Emergency Funds
Even the best financial managers and budgeters have surprise costs that for which they haven’t budgeted. Stuck in Dubai for 7 days due to flight cancellations!?
It’s a good idea to have an emergency source of money for these unexpected events. If you have a credit or debit card you don’t use for anything else (so there is always credit available), it’s a good idea to keep this somewhere separate from your other cards in case you lose your wallet with all you cash and cards (and no, Jimmy Choos on sale are not an emergency!)
And it’s as easy as that!
I’ll be covering top tips for budgeting in my next article but let me know if there’s anything you would like to hear about.
Good luck and have a great time in uni. |
Jo Loney is a financial advisor with St. James’ Place and is on a mission to help people create the right financial plan for their needs, to help them set goals, and explain options with simplicity. A lifelong DE&l champion, she is dedicated to providing a safe space for everyone to plan for and achieve their financial goals and create an equal financial future for all.
Peace A CALL FOR A CALL FOR by Kimberley Kleczka
In February 2022 Russian military forces invaded Ukraine, leaving in its wake tens of thousands of shattered lives and separated families. Citizens on both sites are fighting in a war, that, like all wars, will not end well for anyone. Families are facing a harsh reality, knowing their loved ones might never sit at their dinner table again, that they won’t ever hear their loving words or hold their hands.
The International Women’s Peace Group (IWPG) and IWPG members from all over the world are so concerned about this devastating violence and want to help with a campaign reinforcing what connects us rather than what divides us. IWPG has chosen a sweet symbolism for this effort and for the campaign - Syrniki, a dessert which is a shared national specialty for both Ukrainians and Russians. They call for us all to participate and make delicious Syrniki together. Host a gathering with family, friends, colleagues and neighbors, to commemorate the people who are now restricted from family gatherings and make a statement for an urgent peaceful resolution of this war.
Feel free to take lots of photos and videos, with encouraging messages for the victims of this war and share it with us and the world. Please use the following hashtags:
