Beating the Credit Crunch for students Part 1

Coins, not just for throwing off tall buildings.

This is part 1 of Beating the Credit Crunch for Students.

With scary SEO keywords such as “Credit Crunch“, “Recession” and “We’re all doomed” being thrown about lately, it probably wasn’t the best time to give up my secure part-time job and strike out on my own freelancing.

Well not totally on my own, I just have to survive until Jan 5th when that great establishment The Student Loans company pours free money upon my skull.

Ok so it’s not free money, I will have to pay it back some day but for now it’s better for my sanity to pretend it’s free.

 

Anyway I have learnt a fair bit about managing finances over the past few years of living away from home, albeit some of it has taken a long time to sink in and I am still prone to the odd impulse buy. 500 glow-sticks anyone?

So from my own personal experience here are my top money saving tips. (No doubt my more business and financially minded peers will correct me if I’m wrong)

This is mostly aimed at students who are trying to survive on very limited finances i.e just the student loan.
Due to varying living costs in different cities some of this may not be relevant to you personally but hopefully the principles will be the same.

Banking/Student Loan

Student Accounts

I think student bank accounts are of the devil. Perhaps thats being harsh but I really don’t think the banks are doing students favours offering them interest free overdrafts of up to £3000 (Halifax).

Students are not going to view this as “oh good I’m covered if I get into difficulty” instead this is viewed as “wooooooooooo free money”.

The result of this being that the £3000 “free money” is spent the first year of University and the student spends the rest of University hovering just above the banking fees line, which believe me is not pretty. I lost £100 in fees after making a number of small payments totalling around £30 after I went over my overdraft limit. 

I have no doubt there are students who are perfectly sensible with their finances but I suspect they are in the minority.

Look on down the page to see “With our student bank account, you can keep your interest-free overdraft for the length of your course – that’s up to five years – plus an extra year after you graduate.”

Sounds good at first glance, but do you really want to wind up trying to pay back £3000 to a bank the year after you graduate. You may not have a job yet and this time the student loans company isn’t there to fill the void.

My advice on this is, if possible avoid using an overdraft unless you really really need to. In my case I went into my overdraft in first year and have been trying to get out since. Also I’m with Nationwide who don’t do student accounts which means I pay interest on my overdraft. Which isn’t necessarily a bad thing as it is quite a low rate and it means I don’t view my overdraft as free money (anymore).

If you have online banking use it regularly to keep a check on how much you are spending and what you have left so over expenditure doesn’t sneak up on you.

Student Loan

As for the student loan, don’t waste it buying stuff you don’t need. If you don’t need it to survive either don’t take one out or consider investing it.

Savings

Savings tends to be one of the last things that most students consider while at University and until very recently I was the same, mainly because I never saved for purchases and simply bought things on impluse.
It’s so much more rewarding to buy something with money you have saved up over time for that purpose than to buy it with money you don’t have. Even if you have very limited finances you should at least save a small amount of money. I am currently saving in a couple of ways.

Using my online banking I set up an online saving account with my building society (most banks/building societies have some form of online savings).  I have set up a standing order from my current account to my savings account for £10 a month, it’s not a lot but it’s £120 a year I would spent on something I dont need otherwise. 

Once my finances improve (when I get a paid placement next year) I will increase this.  The account has a fairly high rate of interest and money has to be transferred to my current account before I can withdraw it. 

My other savings method is a more traditional approach, I have a big glass jar into which I throw any 50p coins and the odd £1 coin that I get in my change. This can build up surprisingly quick and I am using it to save towards upgrading my computer at some later date.  Although Louise would like to debate it’s usage.

Spending

Food

Check your bank statement and you will probably find your largest expense is food, I was spending up to£300 a month on food at one point. That’s nearly twice what I’m currently paying for rent.

That’s about £70 a week and roughly added up as follows:

Weekly Groceries:£25

Take Away/Eating out: £15-£25

Snacks: £7-10

Soft drinks:£10

I’m currently spending £15-£20 a week on food, that’s £80 a month which is £220 less than I was spending.  Just to clarify, like a lot of students I go home at the weekends where I am fed by my mother ( ah bless). While I’m home I raid the cupboards for any “spare” food, although this would rarely total more than about £5 in cost.

Weekly Groceries:

 

• Never ever shop on an empty stomach, you will buy lots of nice expensive extras that you will regret later.
• WRITE A LIST! And stick to it.
• Only bring enough cash for what you intend to buy at the shop, leave your cards at home. You are most likely to impulse buy while grocery shopping.
• Shop less, if you are well organised only go grocery shopping every couple of weeks. You will save on fuel as well.
• Learn how to cook from first principles i.e buy ingredients and follow recipes don’t buy ready meals.
• Learn to love the spud, potatoes are cheap.
• If you are not squeamish buy a whole chicken at the supermarket and butcher it yourself. You get two fillets, two legs and two wings for about the price of two pre-packed fillets.
• Make friends with the local butcher and bulk buy meat at discounted prices.
• Spread the cost of items such as milk, sugar, coffee etc with the whole house.
• Chopped tomatoes are your friend, you can make pretty much any tomato based sauce using the right spices and herbs.
• Spices and herbs are expensive initially but will last you ages.
• If you go home at the weekends, raid the cupboards (with permission of course) for items much as beans, tuna, sweetcorn, eggs or anything else your parents may stockpile in the wash house (or maybe thats just my parents).

I’ll finish this section with a simple recipe of my own devising, although I’m sure its been done before.

Place a chicken leg in a roasting dish, stab some holes in it,  coat it in honey, throw in some chopped onion and roast at 180oC for about 40mins or until it goes brown and crispy. Serve with boiled baby potatoes and some form of veg. Simple.

Take Away/Eating out

Don’t.

Unless you have lost the power of your hands there is no valid reason not to cook your own meals. It’s cheaper, rewarding and a lot healthier than carryout.  Of course I wouldn’t invite everyone round to mine for spag bol on special occasions but the less you eat out the more you will appreciate it (well that’s what my mum always says).

Snacks and softdrinks

Again don’t.

Fill up on decent meals at mealtimes and you won’t need to snack. I have sensitive teeth so I cant really eat sweets that much anyway (not that im recommending you get sensitive teeth). As for softdrinks, whats wrong with re-filling a bottle with tap water. If you must then bulk buy when they are on offer in supermarkets and DONT DRINK THEM ALL AT ONCE Mr Boyd.

 

End of part one.

If you agree/disagree or have any other points related to this post please comment.

In the next part I will cover transport, accomodation, mobile phones and whatever else I can think of.