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| BankruptcyNews |
Posted - 19 July 2007 : 10:12:54
Students staying at home to save cash
Students’ financial worries mean that almost a third (31 per cent) of the 446, 765 young people planning to start university this year intend to continue living with their parents, compared to just a fifth last year (22 per cent), according to a new report from Lloyds TSB student banking.
Of the students surveyed, nearly a third (31 per cent) said that if they didn’t live at home, it would be too expensive for them to go to university. A further eight out of ten (79 per cent) intend to stay with Mum and Dad as it is an easy way to save money and over a quarter (27 per cent) plan to live at home to help keep their student debt under control.
In contrast, two fifths (41 per cent) of young people admitted that living at home was ‘an easy life’ and even if they could afford to move out, they’d choose to stay put.
Students who are intending to live away from home said making the money stretch and managing finances for the first time is a concern. More than a quarter (26 per cent) said that they are worried about managing their money whilst at university; 28 per cent are concerned about how to make their money last the full term and a fifth of students surveyed admitted they have never set a budget and would like some further support.
However, six out of ten (63 per cent) think the independence they will get is worth the extra financial burden while over a quarter (29 per cent) said that they can’t stay at home as the university they have chosen is too far away. Only one in ten have no concerns about the additional debts that living away from home will bring.
The main reason students gave for leaving home was to be close to the university campus cited by three quarters (75 per cent) and to gain independence, mentioned by 69 per cent. Three fifths (59 per cent) are attracted by the social aspects of living away from home and nearly a quarter (23 per cent) admits that they wanted to escape their parents’ clutches.
The survey also revealed that finding ways to manage student debt is a priority for all students. Seven out of ten ( 71 per cent) are planning to work during term time; in fact over a quarter of students surveyed said that a part time job is essential to pay their way through. In contrast, ten per cent admitted that they plan to rely on their loans and overdraft to fund university life.
In addition, over a half (58 per cent) said that they have already applied for the Government’s student finance package, with 46 per cent applying for a loan to cover tuition fees. A further two fifths of young people (40 per cent) said they have applied for a maintenance loan to help with living costs and 20 per cent have applied for a bursary from their chosen university.
Caroline Brady, Lloyds TSB student banking said: “Students face higher levels of debt than ever before and whilst it’s essential that they find ways to keep costs to a minimum it is also important that students think carefully about all the options.
“Savvy budgeting skills can really help students to start off on the right foot while they get to grips with managing their own money. A smart approach is to plan ahead and seek guidance now on how to manage your finances to avoid getting into trouble later on.”
Alvin Hall, independent financial expert said: “Many students have the ability to shut down or seal off that part of their brains that know they must handle their money rationally and responsibly. This deliberate denial can only last so long before one has to begin dealing with financial problems that are now much bigger, and probably more desperate. The result can be stress that takes your mind off your studies, humbling request for cash from the bank of Mum and Dad, and, if credit is involved, huge interest charges and a ruined credit rating. This is not a good way to begin adult life after university.”
To help inform students, independent financial expert Alvin Hall has created six proven tips to help student’s better control their finances.
1. Set a strict daily or weekly limit on the money you spend on entertainment, especially drinking and eating out with friends. As tempting as it may be to throw caution to the wind when you’re having a great time hanging out with your mates, always try to be prudent. Keep the amount of money you are permitted to spend always in the back of your mind. And don’t feel embarrassed to say that you can only spend so much. Other friends may feel the same way and appreciate your keeping the costs reasonable.
2. Withdraw money from the ATM only once a week. If you think you are not good at budgeting, this strategy will help you begin to think about and control your spending. On the same day each week, withdraw a fixed amount of money to cover your weekly expenses. Each weekly withdrawal must be for the same amount. This way you “regularise” your outgoings. Over the course of the week as you see your actual cash decline, you will, by necessity, begin to alter your spending to stretch your money until you can next visit the cash machine. You must resist all desire to go to the ATM early, borrow money from friends, or call your parents or other relatives for money.
3. Only carry in your wallet the amount of cash you are allowed to spend each day. This is really an extension of the advice in #2, but is aimed at those individuals who know they will have a hard time controlling their desires hour by hour, such as the temptation to have an extra afternoon latte or an additional early evening pint. If you spend the money before the day is gone, then you must not borrow from tomorrow’s money. If you know you have a significant expense coming up, then you have to save for it from your daily allowance.
4. Prepare your own meals. Eating out always costs more than it does to make the food yourself. Making your own sandwiches for lunch is a proven way to keep you daily expenditures in check. Not only can you take advantage of special offers at the supermarket saving even more money and but you can also eat more healthily.
5. Use your limited funds prudently. When you can, buy second hand books instead of new ones. And when it comes to clothing, always buy any items you need when it is on sale. Learn patience. This will help you to stretch every penny and pound you have. And it is a skill that will serve you well in life after university.
6. Take advantage of all benefits that come with the accounts that that many banks and building societies offer to university students. Importantly, do not abuse the overdraft facility that typically comes with these accounts. It is not free money; it is, in reality, a loan.
Source: easier.com
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