The Biggest Money Mistakes Students Make

Making the transition to living as a student in uni is one of the biggest changes you will experience in life. Some people are lucky, they get prepared for it by their parents. Others experience quite a harsh divide between living under someone else’s protection and now being financially responsible for all of your choices. Even if you get a sizeable student loan, you’re in complete charge of how you use it. As such, you need to be responsible and do what you can to avoid making the mistakes mentioned below.

student with open book on lap and pink highlighter

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Not budgeting your money

First thing’s first, you need to put together a planned idea of how you’re going to spend your money. There are guides that can help you specifically budget for when you start university, but after you’ve done that, you should have a budget for daily life, as well. By creating a budget, you’re taking a closer look at your financial habits, which can make it much easier to spot those habits that you should try reducing or getting rid of completely. Furthermore, it gets you into habits like planning your meals and grocery shopping around them so you rely on takeout and expensive meals on campus a little less.


Going wild on lump-sum payments

Many students will receive lump-sum payments throughout the university year, such as your maintenance loan or the financial reward of any scholarships you might receive. It might be tempting to look at all of this free money and suddenly decide to treat yourself like you’re never able to. However, the truth is that if you do that, you will almost certainly end up running out of money partway through the season, and might have to go into debt to keep paying for rent and other daily expenses. Budgeting apps such as Yolt can help you look over your long-term plan for how you’re going to use your lump-sum payments, but the most important thing is learning delayed gratification and avoiding the urge to splurge when those payments first come in.


Not using student discounts where applicable

You might think that your student discounts are primarily for helping you save on discretionary purchases such as shoes, eating out, and getting into clubs. However, that’s far from the case. There are student discounts and deals that apply to services we all use, such as using our mobile phone. The Smarty student sim plan is a textbook example of this, offering a better deal than you would be able to get if you weren’t a student. When it comes to utilities, long-term services or subscriptions, make sure that you always check to see if there’s a student discount available. It isn’t always the case, but it could help you discover potential opportunities to save a lot of money in the long run.

grey cash machine

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Overuse of credit and overdraft

Using your credit card isn’t a bad idea. In fact, it can help you build your credit score for future loans. However, it’s important to always plan your credit card use, and make sure you have a predetermined plan to pay it off. If you’re getting credit cards, then be sure to look into options such as HSBC Student Credit Cards, which tend to offer more generous benefits than others. Take into account the same consideration with your overdraft, too. It’s too common that students treat an overdraft as free money, only to end up having to spend years paying it off after they get out of uni.


Not taking grants, bursaries, and other bonuses

You might be surprised just how many opportunities you have to get a little extra cash to help you deal with the costs of being a student. You might think that all the scholarships and bursaries out there are solely for the top performers, but many of them are also aimed at those from low-income families, as well as those who simply come and ask first. Check out the Save the Student guide for bursaries and scholarship sources if you’re in need of a little extra cash. Many of these will provide the money without expecting you to pay back, and you can also talk to your university’s financial or bursaries office for some help and advice there, too.


Forgetting to put together an emergency fund

Whenever you receive a little cash, be it from a maintenance loan, a birthday present, a bursary, or even a part-time job you manage to pick up, you should always put a little bit of it aside. An emergency fund is designed, as the name suggests, to help you deal with the unexpected costs that are unfortunately likely to come your way. Whether your car breaks down, or you have to replace a broken laptop, you don’t want to have to put yourself into debt to deal with it. An emergency fund acts as a cushion that protects you financially while making sure you don’t have to go without the things you need to get through student life.

pile of university books

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Dealing with debt badly

Avoiding bad debt important, but knowing the best way to deal with it if you do land in it is just as important. One of the worst mistakes students can make with debt is trying to ignore it completely. It won’t go away, even if you do manage to forget about it, and can land you in serious legal trouble, even bankruptcy, down the line. Rather, the best answer is always to stay in contact with your creditors. Come up with a plan to pay it off as best as you can and, if you can’t, try and negotiate with them. Many will be willing to rearrange your debt in order to make sure they still get what they’re owed, even if it takes longer than they would like.

If you do make a few of the mistakes mentioned above, it’s not likely to be the end of the world. However, getting into debt can continue to affect your life for long beyond the uni experience, so you want to make sure you avoid it as best as possible.


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