Where your student loan will go over the course of a year

student loan

By Pamela Head,

When you fill in that student loan application, confirm your place at university and first get that lump sum paid into your student bank account, it looks like it’ll be more than enough. But have you ever wondered where all your money has disappeared to by the time you reach the end of the year?

Firstly, a sizeable chunk of that, if not all of it for some of you, will go on paying rent to student accommodation… especially student accommodation in London. Student living is expensive and student loans do not cover the cost of accommodation for some universities, so if this is you, then be prepared to beg at the Bank of Mum and Dad. Or get a part-time job. Seriously!

If you manage to have some money left over after paying these fees, then the next thing you’ll most likely buy will be food. This is a necessity in order to live, but as money grows tighter over the year, it will be one you’ll willingly reduce to 7p super noodles in order to buy other things. However, this will also probably be the area that you waste the most amount of money on. You’ll buy food because you’re craving it from convenience stores and then either pay too much just because you’re hungry, or throw it away because you’ve eaten with your eyes and bought too much. Be. Careful.

At the beginning of term, you’ll most likely have to shell out for textbooks. This can go up to £400 for some courses, so make sure you ask your teachers which ones are completely essential and which ones you can make do with checking out of the library in order to try and make that money stretch past your first week. Second hand books also do just the same job as new ones.

Alcohol. I don’t need to say any more than that.

Random things. I can’t make this point any clearer than that, I’m afraid. Over the course of a year, you’ll inevitably collect things because you associate them with a fun day, a happy memory, a person you like or it’s just plain weird/cool/fascinating. When you come to move out, you’ll be reluctant to throw away the 47 Kinder Egg toys you’ve collected, but, really, it’s just random rubbish. And how much did it cost you?

Clothes. Socks will wear out, you’ll forget that essential raincoat or you’ll get bored one day and your town will do pretty hefty student discounts and student deals on meals out. Then there are things like shampoo, deodorant and toothpaste, which you’ll need to go and spend your money on in order to function happily in society.

So far, you’re probably thinking ‘okay, yeah, I can figure all that out and relate’. But the one area your student loan will go on that most people forget is housing for the following year. If your university doesn’t have enough halls of residence for you to reside in during second and third year, then you’ll most likely be moving off campus into private student accommodation. If this happens, then you’ll be entering the world of letting agents, student lettings, landlords and deposits. University living costs and living expenses are high.

Letting agents generally require you to pay an administration fee, a holding deposit and the first month’s rent. This can run up to £1,000 if you live in an expensive and student-saturated area. You’ll also need to pay this during your first year in order to secure a house to live in during second year, and this is a cost that a lot of students do not anticipate. Don’t let yourself be caught out, and prepare yourself for this expense.

This is probably the first time you’ve had such a large sum of money in your possession so try not to spend it all at once. Remember that it is supposed to feed, clothe and house you for the next three to four months so no matter how much you desperately want that new iPod or Xbox, resist – that’s what Christmas is for.

The costs of undergraduate study will put you into debt for years after you’ve left as you start the repayments, so make sure you develop a good student budget and be sensible here. If in doubt, use one of the university budget calculators (http://www.ucas.com/students/startinguni/managing_money/budgeting/budget_calculator) to make sure you’ve covered everything you need to.

Some of these things do seem obvious, but if you make yourself completely aware that these are the areas that absorb money like a sponge absorbs water, then you’ll be able to stop yourself when reaching for that £4 cheese and pickle sandwich you don’t need because you’ve already had lunch and not have to resort to handing out flyers dressed as a giant sandwich in order to gather together enough money to feed yourself.