Just started at College or University? It is a whole new way of life, a whole new way of learning, and sadly and inevitably, a shock to the system when it comes to managing your money! Indeed, 71% of students who completed Save the Student'sNational Student Money Survey (NSMS 2020), commented they wish they’d had better financial education before starting College or Uni so that they could at least try to avoid student debt.

Budgeting doesn’t sound like the most enthralling subject to learn at school, or conversation to have around the dinner table. But, if we did, life might be different and so much easier for the students who had been taught how to avoid debt during the first years of independence.

Yes, it is a challenge, but it needn’t be as bad as all that if you think carefully and plan your spending. Safe to say, though, it’s not one of the main priorities when you enter your student accommodation on that first day, or even that first month!

Current Pandemic aside, all you want to do is get out, meet new friends, and live that student lifestyle you have heard so much about. You find the student bars, buy takeaways, spend money on clothes, computer games, and all sorts of other things which you can suddenly afford as your student loan sits in your bank account. But then, three or four weeks later, you realise your first semester’s budget is blown.  

Quick! Look for part time jobs. Apply for the overdraft you promised your parents you wouldn’t ever get into. It’s way too soon to be asking the ‘Bank of Mum and Dad’ for a top up until you’re home again at Christmas and can go back to your job in the local pub to repay it. Suddenly, beans on toast and jacket potatoes seem to be your go-to dinners.

But, like we said, it doesn’t have to be all that bad, and learning how to avoid student debt really will pay off in the long run.

The Harsh Reality – Income vs Outgoings

Work out your income or starting figure:

Whether it’s from savings, a loan, funding through your parents, or a part time job.

Do you have a regular payment into your account, or are you lucky enough to have a lump sum to set you off? Work out how much you will have coming into your account per semester as your basis.

Calculate your main ‘core’ expenses per week:

  • Rent and bills (Gas, electricity, water, insurances, broadband, TV Licence)
  • Groceries, household shopping – these can add up to more than you think if you’re not used to shopping for yourself, so be careful
  • Books, tech (laptop, printer, phone, etc), study supplies and any uniform or special purpose clothing
  • Transport (car insurance, maintenance costs, fuel, bus/train, etc)

Additional costs (I can guarantee this one will be underestimated!):

  • Nights out – cinema, meals, transport, drink
  • Gym membership, subscriptions (Netflix, Spotify, etc), haircut, and beauty treatments – it doesn’t seem to matter how much or how little spare cash you have, these still seem to be on the high priority list. Do they really need to be?
  • New clothes
  • Takeaways

  Calculate your income less outgoings:

  • Divide your income into the number of weeks in the semester, then deduct your weekly expenditure.   Do you have anything left over or is it a negative figure (if so look at your additional costs and see where you can cut back)?
  • Breaking the budget down into weekly chunks is more realistic to stick to (and a little less scary if you overspend one week and can make up for it the next). Yes, you probably did work it out correctly, and yes it is likely to be a shock!
  • This is also the time to sit down and work out how to get the best deals everywhere and make your money last as long as possible. Far better this way than way overspending week after week into the semester, simply because you didn’t watch the pennies in the first few weeks.
  • Set up a spreadsheet to help you track your spending, otherwise it's still easy to lose sight.   Perhaps consider opening a savings account for your income to go into, and then transfer your weekly budget into your current account from there.  That way you have total control.
  • The average student monthly expenditure (according to NSMS 2020) is £795, which is pretty eye opening, particularly if you have no income during your student years.

Savings Ideas

It might sound obvious, but if you’re thinking of buying something, try saving for it before you do! It’s amazing how quickly you realise you don’t actually need it. Or how quickly you can save when you desperately want something!

What do you do with all those pennies you collect in your pocket or purse? Add them up and start trying the penny per day savings scheme – day 1 save 1p, day 2 save 2p, day 10 save 10p, etc. By the end of the year you’ll have saved £650. Well you will if you’ve not decided to crack the safe open in the meantime!

A ‘spend-free zone’ just for one weekend per month. Go out for a walk, stay in, watch a film, pamper yourself, read a book – do what we used to do in the old days! Can you hear your Great Gran talking to you now about the ‘good old days’ when she had one candle to last the week, and had to wrap up in blankets and get dressed by the fire when it was too cold upstairs?!

Household items – if you are responsible for these, buy in bulk with housemates as it will cut the overall costs down substantially over time.

Vouchers and discount codes – it’s worth spending time to research where they are available.

Grocery shopping towards the end of the day always finds discounts, special offers, etc but watch out for short shelf lives and be careful not to let food go to waste!


Consider your Credit Rating  

DO NOT let yourself get into debt or fall behind with your payments. Put your regular payments on to a Direct Debit and keep up the payments.

Once you fall behind with one month, it’s not always easy to get back on track. If you start out in life with a poor credit rating, it could take years to put it right.


Other Ways to Avoid Student Debt

Part Time Jobs - It’s not easy right now being a student, especially with this Pandemic, as the traditional bar/restaurant/shop assistant jobs may not be an option. But there are plenty of online jobs now, so look around for something to fit in between your study time and lectures.

Student Funding - make sure you have access to all available funding, grants, bursaries, etc. Again, it's worth spending time researching what is available. But also make sure you are fully aware of any repayment terms attached.   And, if you do find yourself in serious financial hardship, contact the student support function of your university or college - they sometimes have hardship funds which you can apply for in certain serious circumstances.

Interest Free Overdraft - if you have to fall back on an overdraft, do your research and find the best one for you. The longest term interest-free overdraft is one to look out for. Students often set up a second bank account to have a 'buffer' and it's a good idea to manage your income through a Direct Debit from one account to another. You are more likely to think twice about spending if you have to transfer the funds first.

Switching bank accounts can give good incentives too, so keep your eye out for any new deals, although you are likely to need to be in the black to be allowed to switch.

Utilities - switching utility providers if you are in private accommodation and mobile phone networks is another good way to save money. You may be offered a better deal to stay with your current provider, or else you may find it cheaper to move to another.   


What to Avoid

Private loans - It may be tempting to apply for a loan. They're often advertised as an instant cash payment. But they can be phenomenally high interest, so the amount you will end up repaying will far outweigh the benefit of the cash you receive.  Always get advice from someone financially savvy before taking out a loan.

Credit Card - as above, these may be a quick and easy option for instant cash, but the interest payable can be way above realistic repayment terms.

So, to summarise how to avoid student debt.  It basically comes down to careful planning, creating, and sticking to a budget, finding the best discount options available, and save! Save! Save!   If you do need to discuss any of the above in further detail, please do not hesitate to contact us. We can provide specialist knowledge of student finances and talk through the most effective planning to ease you through your student life so you can focus on your studies rather than your finances.   

You can call 0800 6243 111 or email This email address is being protected from spambots. You need JavaScript enabled to view it.