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| Students Investing In Their Future Need To Manage Their Finances Today |
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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lamentably outdated.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.
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