Tuesday, November 01, 2005

Students Investing In Their Future Need To Manage Their Finances Today

With the A-level results coming out, the long wait for UK
school leavers hoping to go to university will soon be over.
All the hard work that has been put into achieving the grades
required will now pay off and the fun and freedom that is
student life can begin. This may have been the case in the
past, but the notion that university life is socially and
financially responsibility free is now lamentably outdated.
These days, if you want to study beyond the age of 18, learning
becomes very expensive.

According to the National Union of Students (NUS) (
http://www.nusonline.co.uk/ ) the typical cost of living
expenses at a university outside London are around £8,600 a
year for the essentials of food, rent, fuel, books and tuition.
For students' studying in London they can expect to pay over
£10,000 a year.

Barclays bank has calculated that currently the average
graduate leaves university owing £13,501. Jeremy Law, the head
of student and graduate banking at Barclays said, "students
starting a three-year course this September could be graduating
with debts of almost £20,000.graduates will find themselves with
debts for years to come which may affect their ability to buy
homes and invest in pensions.prince or pauper, these levels of
debt may act as a deterrent to some people considering going to
university."

With student debt growing every year - financial comparison
sites like Moneynet ( http://www.moneynet.co.uk ) are seeing an
increased need for students to take control early and carefully
plan for their future. Richard Brown, Chief Executive of
Moneynet said "We all understand the importance of budgeting,
but for students this can be especially difficult."

HSBC has estimated that there will be a difference of around
£6,400 between the average student's income through loans and
their total expenditure this year, making the skill of how to
budget effectively a vitally important one to develop early on
in a student's life.

A spokesperson for the NUS said, "When you get your student
loan it can seem like a lot of money. And for those who have
never had to juggle lots of money before it can be difficult
not to go out and blow it."

There is help available from the NUS and other sources to
students who get into financial difficulty. The NUS has set up
advice centres which can provide support on money management as
well as advice on how to access any other funds such as Higher
Education Grants, Childcare Grants, Disabled Students'
Allowance, Parents' Learning Allowance, as well as possible
reduced rate loans, which may be available dependent on course
subjects and individual circumstances.

An important issue for freshers to learn is that making careful
financial choices early on, such as the right bank account, can
help keep graduation debt to a minimum. By focusing on the
interest rates, authorised and unauthorised overdraft borrowing
rates, bank charges and ease of access to the money in their
account, rather than the host of freebie sign-up gimmicks can
make all the difference.

The NUS advises, "Students not to get a credit card as you will
pay exactly the same high interest rates as everyone else". In
general, credit cards rarely carry genuinely privileged terms
solely for students, however students can still utilise cheap
forms of credit specifically devised for their circumstances,
such as graduated interest-free overdrafts and low interest
student loans, before resorting to a credit card if necessary.

Living at home will help to keep costs down, but for most
students, this is frequently either not possible, or not
desirable. The best way to make finances go further whilst at
college is obviously to get some form of job that will fit in
around studying. Although many employers do not like employees
having irregular working hours due to external commitments,
there are some employers who will veritably embrace students as
they can fill in on a part-time basis to cover unsociable hours
and holiday periods. Supermarkets, restaurants and bars are
ideal for student work, as is working late shifts in large
financial firms, or being a mystery shopper for research
companies, or even becoming a film extra for £50 to £200 a day.


The real problem that needs to be in the minds of all students
though is that any money that they borrow, whether it is
through a loan or a credit card, must still be paid back at
some point, even if that time may seem a long way off, and they
expect to be earning a high salary. The truth is that there are
more graduates leaving university every year, and there is
increasing competition for what seems to be a dwindling
graduate job market with diminishing pay rates. Students need
to take control of their finances as early as possible in order
to stop their finances taking control of them for a long time to
come.


About The Author: Richard lives in Edinburgh, occasionally
writing for the personal finance blog Cashzilla (
http://cashzilla.blogspot.com/ ), and hates Brassica oleracea
var gemmifera (aka brussel sprouts).