Staying on top of student finances at university this year, 4 ways how

Although financial stress impacts all generations, the situation is most serious among millennials - so plan ahead to avoid suffering from money worries down the line

About to start university? It’s an exciting time full of new people, new cities, and a whole new sense of independence. However, the experience can often be overshadowed by ever-growing concerns about money.

It’s easy to understand why - whether it’s the tripling of tuition fees or the recent announcement maintenance grants are being replaced with loans - this year’s cohort and their families have to confront even greater financial pressures than their predecessors. That’s why the point of departure for university offers a great opportunity for students and their families to focus on their financial well-being.

The importance of this was underlined in a recent Neyber survey of over 10,000 UK workers which yielded some worrying findings. Although financial stress impacts all generations, the situation is most serious among millennials. To give some context, 16 per cent of 18 to 24-year-olds have already defaulted on debt repayments. It’s, therefore, no wonder that 80 per cent are already suffering from financial worries.

For many, university provides an overwhelming environment to experience financial independence for the first time, and it’s no surprise many turn to the Bank of Mum and Dad. Recently released research revealed parents give, on average, £2,285 per year to their children at university. While for some this is unsustainable, and for others not even an option, it also fosters a culture of relying on borrowing early on.

Having worked in banking for many years, I’ve seen, first-hand, the all too slippery slope created by a culture of unsustainable borrowing. However, it doesn’t take much to address this trend. More often than not, a change in attitudes towards personal finance, and some easily implemented advice, can significantly improve your financial well-being.

With this in mind, here are some simple tips to take on board. This behaviour could have a positive impact on the lives of students during their university years and when they enter the world of work following graduation:

1. Be careful with credit

It’s a slippery slope to becoming reliant on credit cards; with the FCA recently commenting that, as a nation, we are becoming too dependent on credit. Credit cards definitely serve a purpose, whether that’s guaranteed insurance when booking a holiday, or helping to make larger one-off purchases - but only if you can afford to pay it off in a timely manner to avoid incurring huge interest rates and starting a pattern of constant borrowing. In short, if you can’t afford it now, don’t buy it.

2. Ditch the daily habit

Enjoy a daily Costa Coffee on the way to lectures, or partial to a takeaway after a night out? These small purchases may not seem extravagant at the time, but can eventually add up to a large sum. Rather than thinking of the things you’re depriving yourself of, think of the money you’re saving and what you could get instead. Take the daily coffee, for example: while it may only seem like £2 a day, that’s £60 a month - and a whopping £728 per year. That money could be used for a holiday, or even put into a savings account. It’s this type of attitude that will help turn you from a borrower to a saver.

3. Trim the cost of travel

An absolutely vital cost-saving method for any student is the 16 to 25 railcard which offers up to third off rail fares all year around. With rail fares continuing to rise, it’s amazing how much you can save on those essential trips home or to visit friends at other unis. A few banks offer these railcards for free as an incentive for opening a student account, but you can also save up to 12 per cent if you have an NUS Extra card. National Express also offers up to a quarter off the price of coach fares.

4. Dine out on discounts and deals

As students, you are a captive market for many companies and, as a result, you would be surprised at just how many cut-price offers are available as brands battle for your custom. Most high street restaurants or retail outlets offer some form of student discount. At the other end of the spectrum, you can use your Ucas number to secure discounts on laptops and devices from well-known technology companies. Not only will this save you significant upfront costs, but it helps to foster the sensible culture of shopping around for the best deal years after you graduate.

Monica Kalia is co-founder of Neyber