Whilst most of us will have left school with a pretty good grounding in biology, history and English, one of the areas that many school leavers have been given no education at all, is personal finance.
This important area has long been neglected, and with personal finance getting more complex, there is a big push to get financial literacy on the curriculum from an early age.
Getting to grips with your finances can really mean the difference between just floating or really swimming on your course, and with many students each year citing financial difficulties as one of the reasons for failing or dropping off their course it is never too late to get to get money wise.
The starting point for budgeting is to work out what you have coming in. This might seem like stating the obvious, but when was the last time you sat down and spent 30 minutes looking at your personal budget? And there is little point doing this only once a year – it needs to be regularly reviewed to take into account changes in your lifestyle and larger one-off outgoings.
If you start the month by looking at your income and expected outgoings then there are less likely to be any surprises towards the end of month. You will be better able to see where there may be shortfalls and plan accordingly.
There are some great budgeting tools which can be reviewed on a regular basis and they are comprehensive enough to take into account irregular spending, such as computer hardware, course books, etc.
This really highlights the dent those occasional lattes, magazines and taxi journeys make in your spending. For example, it may make you think more seriously about buying a daily coffee and bottled water when you consider that just one latte and a bottle of water every weekday will cost you £780 a year...
Once you have done a comprehensive budget, check your bank balance regularly. The easiest way to do this is with online banking or by using text alerts.
Do I need to get a job?
Think carefully – there are many beneﬁts to getting a part-time job whilst at university, the biggest being that you’ll get some money out of it. And if you choose the right kind of job, for example working as a health care assistant, it could also enhance your learning experience at university. But it’s important to remember why you are at university – to get a good degree or diploma, in order to get a good job.
If you do decide you need to work – and many students do ﬁnd it is inevitable – make sure you get the work/study balance right. If you are still really struggling, speak to your tutor and consider applying to the University Hardship Funds.
There is no doubt that making your bursary, loan and income from part-time work cover your outgoings is getting increasingly difﬁcult. With well publicised above inﬂation increases in basics such as rent and utilities it is even more important to make savings where you can.
The good news is that there are some great deals to be had. The RCN’s RCNXtra scheme can help with money saving ideas.
Read the regularly updated Money Saving Tips on the following pages, and email us your ideas.
There are plenty of ways to reduce your outgoings and increase your spendable income. Each student will choose their own way of budgeting, and set their own priorities, and no two will be the same.
However, there are certain steps that all students should take to ensure that they are not paying out too much for goods and services, or paying too much tax.
You are exempt from Council Tax if you are a full-time student living on campus or in accommodation shared with other students. You can obtain a Council Tax exemption certificate.
Remember that you have to submit a new Council Tax exemption certiﬁcate in every year that you continue as a full-time student.
Unfortunately you are not eligible for Council Tax exemption if you are a part-time student. However, you may be eligible for a 25% reduction if you live alone, or in certain circumstances you can apply for Council Tax beneﬁt if you have a low income.
Make sure you stay informed and that you do not overpay your taxes. How much Income Tax you pay in each tax year depends on: how much of your income is above your personal allowance and how much of this falls within each tax band. For further information go to the gov.uk website.
Check your payslips and if you are paying tax, you may be entitled to a refund. Visit the National Insurance pages for more information.
National Insurance Contributions (NICs)
You pay the same NICs whether or not you are a student. Your employer will deduct NICs from your pay if they are due. NICs will be due if you earn above a certain rate. For current rates the gov.uk website.
Many students will not have to pay NICs.
NICs are due on your pay for the week or month, so you will not get a refund if you stop working part way through the tax year.
Student bank accounts
It is very easy to be seduced by the freebies offered by banks at the start of the first term, but this is not always the best way to choose your student bank account.
But if it is not the free iPod that seduces you, what should impress you?
Apart from convenience, where banks really differ tends to be in the size of the interest-free overdraft they can offer you. As debt is a fairly inevitable part of student life, make sure you keep the cost of this debt to the minimum by opting for the biggest and longest interest free overdraft facility, and look at the interest rate after the ‘free’ period has finished.
Benefits, Tax Credits and Universal Credit
Certain categories of students can qualify for Tax Credit and Beneﬁts whilst studying. To check if you may qualify for any additional support go to the 'Benefits' section of this guide.
Save on your spending
While shopping around for deals can seem time consuming, there are various money saving sites that can save you many hundreds of pounds on things like insurance, electricity, gym membership or eating out. Never buy any large purchase without ﬁrst checking out whether you can reduce the cost by using an online voucher or deal.
New Government ‘Help to Save’ Scheme
‘Saving’ isn’t always a word associated with being a student, but for those who are able to work and also qualify for a relevant benefit whilst studying, there is a new government scheme that offers generous incentives to those who are in a position to put money away.
Whilst it is likely that only a small percentage of students will qualify, if your family are receiving any of the following benefits it may be worth exploring further.
- Working Tax Credit.
- Entitled to Working Tax Credit and receiving Child Tax Credit.
- Claiming Universal Credit and your household earned £569.22 or more from paid work in your last monthly assessment period.
If you get payments as a couple, you and your partner can apply for your own Help to Save accounts. You need to apply separately.
The Help to Save Account will top up every £1 saved by 50p – an effective 50% bonus on savings. Over a four-year period, the account will boost a maximum saving of £2,400 with a total bonus of £1,200.
The maximum that can be saved is £50 a month. The bonus is paid after two years of saving, but customers can continue the scheme for a further two years for another bonus payment if they wish.
The accounts, which will be administered by HMRC, will be available to working UK residents claiming working tax credits, child tax credits or universal credit.
HMRC says savers should be able to open an account online in around five minutes. Accounts are flexible, allowing customers to set up standing orders on a weekly, fortnightly or monthly basis. One-off payments can also be made online with a debit card.
Withdrawals can be made at any time, although this could reduce the level of bonus paid. For more information visit the gov.uk website.
Information – knowledge – one assignment complete!
Avoid buying costly text books
Use the RCN Libraries and gain access to the largest specialist nursing collection in Europe. Services include:
- access to over 30,000 eBooks and 1,100 full-text eJournals available 24 hours a day via the library website
- download the content immediately, wherever you are
- online subject guides for assignments and dissertations
- advice about searches, creating a bibliography and referencing
- study spaces with free printing, photocopying and scanning at our libraries in Belfast, Cardiff, Edinburgh and London.
You don’t need to subscribe or buy a journal
Instead gain access to over a thousand eJournals - it is even possible to have a table of contents emailed to you each month so you can quickly check if there is something of interest. Popular journals include the British Journal of Nursing and the Journal of Advanced Nursing.
Take advantage of free training offered by the RCN Libraries. Learn how to source books, journals and articles using databases, which are all compatible with your university referencing software. Sessions can be delivered via Skype or or face to face. Look at our website for more information or call 0345 337 3368.
RCNXtra, our online benefits scheme, can help you save money on every day essentials. Whether you need train tickets, a new tablet or toaster, discover discounted prices from over 3000 top UK retailers, including: Apple, Sainsbury’s, Tesco, ASOS, Argos, Microsoft, Currys and many more.
Not only can you save money, you can also collect loyalty points (WOWPoints) every time you spend and redeem these against future purchases.
Our top student deals:
- Up to 55% off on cinema tickets at hundreds of cinemas across the UK
- 30% off HP laptops
- 20% off EE mobile contracts
- 20% off Virgin trains
- 20% off National Express
- Save up to 5% on the weekly shop, with a reloadable shopping card
Don’t keep these great deals you yourself! It’s really easy invite your friends and family to join the scheme too.
More fun for less
With all that studying, you need to reward yourself with some time off every now and then. At RCNXtra you’ll find discounts on package holidays, hotels, restaurants and reduced rate passes for theme parks.
Spend less – everyday
Are your energy bills too high? It takes just five minutes to compare your current energy spend and switch to a cheaper supplier with RCNXtra. You could save up to £166 and earn 2,000 WOWPoints plus earn £50 for referring your friend with First Utility*.
* Information correct at time of publishing.
Whether it is through student loans, bank loans or overdrafts, debt in one form or another is unavoidable for many students. The important thing to remember is that debt doesn’t necessarily have to mean stress.
By budgeting, managing your money sensibly and taking action before things like missed payments and unauthorised overdrafts get out of control, you can avoid getting into financial difficulty.
For a minority, however, there will be times when you simply feel that you just can’t cope with the financial pressures. This will undoubtedly impact on your ability to study, so it is important that as soon as you see major cracks in your finances you seek help.
If you have exhausted these options; and are still struggling – and you have found that your bank will not offer any further support – it is time to get expert debt advice.
Universities don’t want to see students drop off their courses. It doesn’t look good for the university and will ultimately affect its funding. So most universities will have welfare advisers onsite who are also experienced money advisers.
Check with your student union or university welfare services where you can access help and support.
If your university does not offer expert debt advice, contact RCN Direct and ask for a referral through to the RCN Welfare Service, who will offer advice on dealing with your creditors and can assist you to find a suitable debt management solution that can help you to quickly bring your situation back under control.
RCN Direct - 0345 772 6200
Authorised and regulated by the Financial Conduct Authority for consumer credit regulated activities.
Here is some basic advice about dealing with your creditors; but please don’t feel you have to do this all on your own.
The ﬁrst thing you need to do is decide whether you have a debt problem or a money management problem.
A money management problem is where your income is sufﬁcient to cover both your debt repayments and your essential living costs but you spend too much on non-essential items. This can be addressed by following the budgeting steps outlined in previous sections.
A debt problem can be deﬁned as a situation where you are unable to meet your monthly credit commitments, such as minimum credit card payments and meet all your essential living costs such as rent, travel, childcare.
What can I do if I don’t have enough left over to pay my contractual creditor payments in full?
If you have made sure that your income is as high as it can be, and your spending is at the minimum level you can realistically reduce it to, then the next step is to try to reduce your monthly creditor payments to a level that you can afford.
If you feel conﬁdent negotiating with your creditors yourself, then you will need to start by presenting them with your ﬁnancial statement and showing how much you can afford to pay each creditor. This may only be token payments of £1 a month, or slightly more based on the percentage of how much you have left each month. This route is normally referred to as an informal agreement.
If you miss a contractual payment, it is important to realise that this will affect your credit rating. However, in most instances where an individual is insolvent it is likely that a credit rating will be affected.
However, you should always continue to pay your priority debt arrears (rent/mortgage, court ﬁnes, utilities, TV license, CCJs) before your unsecured debts (credit cards, personal loans, overdraft, store cards, catalogue debts). This is because failure to maintain priority debt repayments has much more severe consequences (including ﬁnes, loss of property and even imprisonment) than failure to maintain unsecured debts repayments.
An informal agreement with creditors is not always the only, or indeed the most effective way, of dealing with debts.
There are other insolvency options that you should discuss with an experienced debt adviser. The option that suits your situation best will depend on factors such as the level of debt, the type of debt and in some situations your own personal preferences.
- Try not to panic!
- Work out a realistic budget using the tools outlined on this site.
- Make sure you are getting all the income you are entitled to; and/or get a part-time job.
- Speak to all your creditors and tell them you are seeking advice. Don’t get drawn into making payments you can’t afford at this stage.
- Get advice and decide on a suitable option for tackling the situation.