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How can I manage my money better?

By David Malcolm

Tuesday 14 December 2010 Info and advice

Many students find that managing money isn’t always easy. Here are six top tips to help you manage yours more successfully.

Get help if you’re in trouble

If you’re encountering any financial difficulties, seek guidance as soon as possible. It’s usually easier to fix things the sooner you deal with them. Go to our comprehensive sources of help to find the guidance you need.

If you want more general help to develop your money management skills, there are lots of resources out there. The National Association of Student Money Advisers (NASMA) has student money advisers in institutions throughout the UK. You can find your nearest adviser online. The NASMA website also has lots of helpful hints and tips.

The government’s Money Advice Service also has advice for students, and the charity pfeg (Personal Finance Education Group) has a quiz to help young people maximise their money skills.

Set a budget

Sometimes the most useful advice is also the least exciting: set a budget. Once you determine your expected income versus your expected expenditure, it’s easy to plan for what’s left – or seek help if there’s going to be a shortfall.

Remember to include costs like buying birthday or Christmas presents as well as day-to-day costs like rent, food and bills. The charity Brightside offers an online budgeting tool for students living and studying in England, as well as a budget calculator tailored to the needs of students from outside the UK.

NUS also produces average costs of study and living for students, which may give you a guide to what you might need to spend each year, as well as tips for saving money.

Manage termly payments

Many higher education students find it difficult to budget because loan and grant payments are made each term, whereas bills are often due monthly or weekly. This can often result in money running out towards the end of term.

You can manage this by transferring your loan and grant payments into a savings account, then making monthly or weekly payments into your current account. This helps ensure you’re keeping money aside for later in the term, and you may even make a little bit of interest on your savings along the way.

Make sure you’re getting everything you’re entitled to

The student support system is very complicated, so it’s important to make sure you’re not missing out on anything you’re entitled to. Check our information about funding for higher education and further education, and if you’re in any doubt see an adviser in your students’ union, university or college.

It can be even more complicated if you need to figure out what social security benefits you’re entitled to receive. Most full-time students in further and higher education only qualify for means-tested benefits (like housing benefit) if they’re parents or disabled. Part-time students aren’t usually treated differently to those in full-time education, but there are exceptions (particularly Jobseeker’s Allowance). Again, we have some pointers about social security benefits for students, but if you think you might be entitled to benefits, speak to an adviser or take a look at the government’s benefits information.

Consider how to increase your income

Think about other ways to generate income to supplement the funds you’re entitled to. For example, consider:

  • Charities and trusts: there are hundreds of charities and trusts that offer grants to people in education. See our information on alternative sources of funding for more details.
  • Student overdrafts: most students in full-time higher education can open a student account at one of the major high street banks. These accounts usually offer an interest-free overdraft facility, which can be an inexpensive way of getting extra money. However, bear in mind that this isn’t free money – eventually you’ll have to pay it back. See our information on students and banking.
  • Part-time employment: the majority of students in further and higher education work part-time during term to support their studies. Many universities have a job shop or employment service catering specifically for students to help you find work. Also, check your students' union to see if they have any jobs available in their shops or bars.
    You might be able to generate cash if you have a skill you can share – perhaps you can tutor younger students or school pupils, or you have design skills you can offer. Use websites like studentgems to market your skills and find jobs.
  • Discretionary hardship funds: all colleges and universities run a discretionary hardship fund, and you may be able to get help from these funds if you’re facing financial difficulties. The funds are called different things depending on where you study – Access to Learning Fund in English higher education, Learner Support Fund in English further education, Financial Contingency Fund in Wales, Discretionary Funds in Scotland and Support Funds in Northern Ireland. Whatever the name, they might be able to help you with grants or short-term loans. You’ll need to apply – ask your advice centre about how to do it – and no funding is guaranteed, but most will be as sympathetic as possible.

Check whether you can reduce what you spend

The flipside to increasing your income is to decrease expenditure wherever possible. You can do this by taking advantage of discounts and making sure you don’t pay more than you need to.

  • Council tax exemption: full-time students in further and higher education are usually exempt from paying council tax, so make sure you're not paying unnecessarily. See Do I need to pay council tax? for more details of the rules.
  • Don't overpay income tax: it’s a common misconception that students don't have to pay income tax. They do – it's just that their total income usually doesn't take them over their personal allowance (the amount you can earn in a year without having to pay tax). In the 2012/13 tax year your personal allowance is £8,105 if you’re under 65. If you’ve paid any income tax but haven't earned as much as this, make sure you claim the tax back. See Do I need to pay income tax and national insurance? for more details.
  • Health benefits: students aged over 19 aren’t automatically exempt from all charges for health costs. In some parts of the UK some charges are free (eg prescriptions are free in Wales, Scotland and Northern Ireland), but other costs for (eg dental treatment or eye care) can be charged. However, if you have a low income you can get exemption from these charges. See What healthcare benefits am I entitled to?
  • Travel discounts: one of the biggest costs to any student can be travel. However, many travel companies offer discounts to students or young people. Make sure you take advantage of these (some will require you to buy a card or pass up front, like the 16-25 Railcard).
  • NUS extra card: students are eligible for discounts at many retailers. Lots of these discounts are only available if you have an NUS extra card. It also entitles you to discounted services (such as mobile and broadband), subscriptions, memberships and other special offers.

NUS provides this information in good faith and has taken care to make sure it’s accurate. However, student finance issues can be complicated, and rules change frequently. You should contact the advice centre in your students' union, college or university for support if you’re uncertain or need more help.