Why saving money at university is a good idea
By Pamela Head,
University is seen by some as a party where money is concerned. You’re given a student loan and, apart from rent and food, you can pretty much do what you like with it.
But I’m about to put to you an argument for why you should save that loan and partake in student budgeting rather than spending it on random rubbish and odd food you won’t eat.
Firstly, this is probably the only time in your life that you will be given a loan without having to go through a credit check and about a million hoops set to trip you up by the banks.
Secondly, repaying a student loan is not a great tax on your earnings. Payments are set at a small percentage of your salary, they don’t start until you reach a certain threshold and the debt is wiped clean after a few decades anyway even if you don’t manage to pay it all back. Student saving is possibly the most sensible idea you could have.
So why spend it on stuff you won’t need, use or want in six months when you could put it in a bank account and buy yourself something useful, like a car or a deposit for a house? Budgeting, for students, is key to survival, so go that bit further and budget to save too.
Thirdly, you’ve got yourself a money pot ready for you in case you need it. Say you need a new phone. Where would you find 100 - 300-odd pounds to get it? If you did have the money in your current account, it’d probably make a sizeable dent. If you had a large store of money saved from numerous accumulations of unused student loan, however, you’re golden. New phone ahoy. Saving is also a good idea should you be hit with an unexpected library fine or parking ticket. Save yourself the hassle of having to forego dinner and start a savings account.
Fourthly, you’ll get yourself into a good habit of budgeting. In the current economic climate, this is a valuable and highly necessary skill to have and so it’s good to get into a habit of saving rather than spending. There are university budget calculators available to help you save money (http://www.ucas.com/students/startinguni/managing_money/budgeting/budget_calculator), so even if you aren’t that good at maths, it is possible to work out a comprehensive student budget taking into account all factors.
Fifthly, if something happens like you fail your exams and are not funded by the student loan company, or you forget to reapply for your student loan and are forced to live on savings while it goes through, you won’t have to rely on the Bank of Mum and Dad to get you through it. The cost of uni is pretty high now so plan ahead.
Finally, as a student, you don’t pay tax, so if you get yourself a job whilst at university then it’s a good way to make some extra money for students. If you can handle the work and your course then you could in theory have both – a social life where you buy stupid things like water balloons and Frisbees, and a plan for the future. There are plenty of ways for students to save money, so be sensible as well as a bit dippy.
When you go to university, you become independent and an adult properly for the first time in your life, no matter what the law says about being 18. Saving some money while you’re there will enable you to continue that independence and adulthood for a long time after you’ve left, too.