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Student finance: everything you need to know about managing your money

Our student finance expert answers your most commonly asked questions about money and university

Is it too late to apply for student finance?

No – but you’d better get a move on! You can apply for student finance up to nine months after you start your course but your application could take up to six weeks to process.

How will I receive my student loan?

Your maintenance loan is paid at the start of every term into your student bank account. This doesn’t include extra funds you might get from your university if you’re eligible for further financial support.

What costs do I need to consider?

First up, rent and essential bills. These are all-inclusive (ie one fixed rate) in most student halls, as well as some student houses and private accommodation blocks. Otherwise, you and your housemates will need to organise payments for broadband, gas and electricity, water, streaming services, and a TV license if you want to watch the BBC (yes, even on catch-up.)

To give you an idea of costs, Save the Student reckons the typical student will pay £32 a month for their essential bills, though you might pay less by going without a TV or streaming and using less water/energy (ie taking showers instead of baths). And don’t forget your personal bills, like mobile contracts and subscriptions.

You may also have travel and course expenses on top of your day-to-day costs. Plus, I strongly recommend student insurance for things like laptops, as well as antivirus software and a hard drive to back up your work.

Do I need to pay tax?

If you get a part-time job, you’ll have to pay income tax if you typically earn more than £1,042 a month and national insurance if you earn more than £183. Your employer will deduct this from your wages through Pay As You Earn (PAYE). If you make money online you keep the first £1,000 as your trading allowance but beyond that, you’ll need to contact HMRC.

You don’t have to pay council tax in a pure student house, but you may need to apply for an exemption.

How do I organise the bills?

Inform your suppliers you’ve moved in ASAP. Provide them with accurate readings of your meters so you don’t overpay for estimated readings. Once you get a handle on usage/needs, switch to better broadband and energy deals through a comparison website. Opt for shorter contracts if you’ll only be in the house for nine months and pay by monthly direct debit rather than annually – it’s simpler and cheaper.

Work out how much each housemate owes and nail down a system for paying up. This could mean paying into a joint account or using a bill-splitting app like Splitwise. Only share accounts with housemates who will always pay on time to avoid damaging your credit rating.

How do I make my student loan last?

One word: budgeting. Figure out how much your rent, bills and contracts cost each month and subtract that from your maintenance loan. Transfer that amount into another bank account (it’s a doddle to open one these days) as soon as you receive your loan. If possible, leave an extra £100 in there for unexpected expenses or an expensive period like Christmas.

Split the remaining loan into a weekly or even daily sum. Then bingo! You know much you have left to spend. Also, consider opening another account for any non-essential spending with a digital-first bank like Monzo or Starling. They offer budgeting tools and instant alerts when you use their debit cards so you know where your money is going.

How can I save money?

Get an NUS card and see if you can get a student discount with every retailer you use. Also check out discount schemes offered by StudentBeans, UniDays, Totum, and Young Scot in Scotland.

Go second-hand wherever possible. Cook your own meals using non-perishable goods like beans, lentils, tinned fish and veggies, and passata. Invest in a tupperware box and prep your own lunch before going to campus. Maybe invest in a coffee pot and flask too: Chilly’s offers a 10% discount through UniDays.

What if I struggle financially?

Firstly, speak to the money advice service within your university: they will point you towards hardship funds and bursaries. You may also qualify for universal credit if you’re on a low income.

If you have to borrow extra, your interest-free overdraft is better than expensive credit cards or loans. But you’ll have to pay it back within a few years of graduating to avoid being charged, so don’t go crazy. Try not to exceed the interest-free zone or at the very least, speak to your bank if you fear you might. Finally, don’t be afraid to get help from a debt charity like Stepchange: it’s free, they’re on your side and they’ll help you turn things around.

  • Iona Bain is the founder of the pioneering Young Money Blog, a site dedicated to young people’s finances.

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