In just a few weeks nearly 500,000 students will embark on their university careers which, for most, will be an enriching growth experience – academically and emotionally. But, with the inevitable prospect of mounting graduate debts, Bacs is encouraging students not to let the excitement of new found freedom cloud their financial judgement, a mistake which can plunge them further into the red.
Research from Bacs, the organisation behind Direct Debit, shows that although half of all 16-24 year olds pride themselves on being careful with money, 35% agree that they ‘don’t bother to fuss about money and financial matters as things tend to work out in the end’. The research, conducted amongst over 5,000 GB adults also shows that 34% of 16-24 year olds prefer to live for today rather than plan for the future and 20% would borrow money or pay by credit card rather than save.
Mike Hutchinson, head of marketing at Bacs says: “Our research shows that 21% of young people often find themselves over committed financially. It is a common trap for students living within very tight budgets, where even the slightest reckless spending can have a huge impact. Students should set themselves a few simple financial management rules and stick to them.” Hutchinson’s suggestions to students for helping to keep their personal finances on track include:
- Make a budget, with allowances for regular outgoings, including food and clothes, and stick to it
- Check bank statements every month to ensure all outgoings and income are accounted for – free online banking makes this easy
- Using Direct Debit to pay your energy, rent, credit card and other regular bills will also help to ensure you don’t forget to pay on time, which can lead to unwelcome penalties, interest and bank charges. With credit card bills, set up a Direct Debit instruction to pay at least the minimum amount each month, this way you won’t run the risk of missing the payment date and incurring late payment charges
- Check for money saving offers, which can make a real difference to your overall budget if you pay bills like broadband/TV, mobile phone, and subscriptions by Direct Debit. There are substantial savings to be made with energy bills too – if you’re sharing accommodation, set up a separate bank account for the payment of bills, to which all house-mates contribute, with Direct Debits from this account so that you can take advantage of offers for gas and electricity
- If you’re sharing accommodation, pool your resources, shop in bulk and cook together to save money
- Take advantage of student discounts wherever you can – railcards, bus passes, and cinema/theatre tickets are the obvious ones but search on-line for restaurants, clothes stores and other retailers promoting student offers
- Don’t take your credit card out with you, withdraw only as much cash as you can afford and spend only that