Research has exposed a gap in money management education ahead of students embarking on university, prompting renewed calls for lessons to be compulsory on the school curriculum. We offer budgeting tips for students feeling the pinch.
Almost three in four students struggle to budget as a result of never being taught, recent research has suggested.
Findings from the latest Student Money Survey reveal 70% of students wish they’d had a better financial education, suggesting that the vast majority of young people lack basic money management skills when starting out at university.
This echoes the suggestion by a 2017 study that education about money has stalled, with many secondary schools “failing to provide young people with more information and guidance about financial matters”. In fact, the researchers estimated that just 40% of schools were delivering financial education.
What’s more, a lack of guidance from — or a poor example set by — parents could be exacerbating the problem, leaving students with a poor understanding of how to keep to a tight budget.
Russell Winnard, head of programmes and services at Young Money, says: “Financial capability is an essential life skill and a lack of financial education can affect nearly every aspect of a young person’s life, from their mental wellbeing to their performance at work and even their personal health.
“Going to university can be the first experience many young people have of living independently. The need to manage their money effectively is vital as they take on the responsibility of paying utility bills and budgeting for their spending,” he adds.
Breaking it down
Since being a student today means having to do even more with even less, accessing advice and support around managing your money is even more critical.
“Most students expect to feel hard up to an extent, but with the cost of university at an all-time high, the ability to be smart with what little money they have is so important — and yet many schools are failing to prepare young people with this basic skill,” explains Ashley Tate, chief executive officer at online student bill-sharing tool Split the Bills.
“Fortunately, until financial education is a compulsory part of the curriculum, there is plenty of advice available — for current and prospective students, but also for parents,” she adds.
If you’re about to embark on university life, the following tips should help you make your money go further:
- Use a spend-tracking app — these are handy for making you more aware when parting with your cash. Contactless is great, but makes it all too easy to lose track of your outgoings, especially on a night out. Using an app that gets you to manually input your spending is even better.
- Look into maintenance loans and grants — depending on which part of the UK you’re from and studying in, you might be entitled to a maintenance loan to cover your living costs. Other means-tested grants and finance options might also be available. See the relevant student finance agency for more information:
- Student Finance England
- Student Awards Agency Scotland
- Student Finance Wales
- Student Finance Northern Ireland
- Earn a little extra — if your course schedule allows for a part-time job during term-time, taking on a few hours can make a big difference. Or perhaps you could find some work during the holidays to build up some extra cash. If a job isn’t feasible, there are other ways to boost your cash flow — Save the Student offers good tips.
- Use cash — an alternative to tracking payments with an app is to get into the habit of using good old-fashioned cash. That way you can take out a set amount for the week and ensure you don’t spend more than that.
- Share and save — rather than having 101 different bills to work out among your housemates, use a service that combines utilities into one shared monthly payment — potentially saving you money in the process.
- Ask for help — money is a source of stress and anxiety for many students, so most universities will have a student money adviser or support services available to help you with budgeting techniques and ensure you can access any financial options that you might be entitled to.
- Keep it real — it might be tempting to ‘live for the moment’ and bury your head in the sand, but remembering that you can only spend what you have is as essential for your mental health as it is for your bank balance. Using a budget calculator like the one provided by UCAS can be hugely helpful.
The ability to live within your means is as important after you graduate and beyond as it is while you’re studying. Yet recent research shows that more than half of over-18s who have finished their education and returned to live at home enjoy rent-free living, while the remaining 45% pay £194 a month on average.
“Maintaining the budgeting skills you learn at university is important to take you through the rest of your life,” Ashley adds. “If you’re able to benefit from not paying rent for a while after you graduate, take the opportunity to put some money aside in a high-interest savings account to safeguard your future.”