Use Your Cash Wisely: 10 Major Money Tips

On July 31, financial expert Alvin Hall and Head of Student Accounts at Lloyds TSB, Caroline Brady, answered student’s questions to help them make the most of their money at university.

Inspired by this, I’ve taken some of the most important points within the talk (it’s still available to watch in full), added tips that worked well for me personally, and given my take on how you can use your cash wisely.  In total, 10 major money tips below to help you on your frugal student ways:

A Pound (photo by j0nn)

A Pound (photo by j0nn)

  1. Set a budget – Even if you aren’t sure what bills you’re going to be landed with, it’s crucial  that you get an idea of how much money you won’t even get to see.  Rent, TV Licence, utility bills (if you’re off campus), administrative fees…they’re all charges that will soon part you from your cash.  So even if you can’t produce a totally accurate budget, it’s wise to get an idea just how much less money you’ll have once you’ve accounted for the outgoings you can’t avoid.  And for help, use The Student Calculator online.
  2. Note all your outgoings – Buy a small cashbook or notebook and list everything you pay for, even if it’s just a pack of chewing gum.  I did this for about 3 months when I first started uni and it helped me not only spot where I could spend less, but also made me more conscious about my purchases and stopped me from a couple of stupid buys.  After those months, I was able to ditch the cashbook and take greater responsibility without even thinking about it.
  3. Be responsible for yourself – Following on from the last point, it pays to be your own boss.  If you rely on others, you’ll end up blaming others if your financial situation goes awry.  I’m sure you trust your parents, but you can only get a proper understanding of your finances when you take direct responsibility.
  4. Understand inflationary dangers – The economy is currently facing inflationary pressures.  The  price of milk, pasta, eggs, and pretty much all food, is rocketing up.  Clearly you’ll need to buy food and drink, but be careful where your money goes and don’t rely on prices today to be the same tomorrow.  When you’re on a tight budget, every penny counts and price hikes mean you may not be able to afford as much a few months down the line.  The same inflationary issues are hitting all sorts of things, including gas and electricity prices.  British Gas have just raised the price of gas by a massive 35%.  If you’ve been living off campus and are about to go back to your student home, beware that you’ll probably have to pay more for your quarterly bills (all utility companies are expected to raise prices now).  It’s best to know about these shocks in advance (and see if you can get a cheaper deal), rather than get stuck and unprepared later down the line.
  5. Open the best student bank account for your circumstances –  The best account for you will depend on your circumstances.  Work out what your needs are likely to be and go from there.  For instance, must you rely on the biggest overdraft out there?  If so, Halifax (as of August 4) give up to £3000 interest-free while you study.  Or will you have some cash in the bank from a gap year spent working?  HSBC pay 6% interest on the first £1000 on your cash with their student account, while Alliance & Leicester pay a massive 10% interest on the first £1000 with their Premier 21 Current Account.  Finally, if you’re more interested in freebies, Natwest has an extremely useful 5-year 16-25 (Young Persons) Railcard.  Of all freebies, I’ve always been a big fan of the railcard deals and I’ve saved a massive amount of money on my rail fares with one of these cards. [These accounts and rates were available at time of writing…please do check with banks for up to date information on each account before you choose one!]
  6. Focus on what makes you happy and control your fun – Being careful with your money doesn’t mean being boring.  Alvin Hall and Caroline Brady both agreed in their talk that money-saving doesn’t mean you’ll be sat in your room alone, sipping water and twiddling your thumbs.  The point of money  management is to use the money wisely on what brings you most fun and happiness.  At the same time,  the controlling aspect is to restrict the amount you engage in those fun activities if they cost you too much money.  Alvin Hall suggested that he didn’t drink alcohol while at uni, but he still took part in all the festivities and wasn’t seen as ‘boring’.  I certainly didn’t go that far, but while I saw some friends go out every single night and end up with no money, cranked-up credit cards and overwhelming overdrafts, I went out on two or three nights, whilst spending other evenings on less costly activities (even if it was just going to a friend’s place or having a loud night in with housemates or (heaven forbid!!) catching up on study.
  7. Be careful with ‘overdraft’ facilities – Yes, an interest-free overdraft is an amazing thing to have when you’re strapped for cash.  I made major use of my overdraft and was thankful it was there.  However, don’t confuse the overdraft with lots of free, available cash.  The overdraft is there to help you deal with your situation, not spend, spend, spend, until that facility has disappeared too.   Use any interest-free offering sparingly and it will help in any ‘difficult’ moments.
  8. Don’t get excited by lump sums of cash – When you get a large chunk of loan or bursary, it’s not  meant to be spent within a few days.  Sure, it looks tempting, but use your budget to work out what large outgoings are due (such as rent) and consider how long you need to eek this money out until the next large chunk of money is set to appear in your bank account.  When you realise this money is meant to keep you going for the next few months, it then doesn’t look like quite the windfall you once thought it was.
  9. Shop carefully – Look for 3-for-2 offers and similar promotions.  But don’t just buy stuff  because it’s on offer.  If you don’t need it, don’t buy it.  There are two schools of thought on this…One school (mine) says that there’s no need to write shopping lists if you’re not picky.  You can just buy what’s on offer and enjoy double the offerings.  The next month will be a nice surprise as the supermarkets change the offers and let you experience lots of other wonderful goodies.  The other school of thought (my wife’s) is that you need to write a list to stop tempting you from buying stuff that you don’t need.  With a firm list in place, anything on offer is a bonus…so if you need deodorant, find one on 3-for-2.  If you want cheese, see if there’s a posh one on half-price, so it costs even less than the bog-standard cheddar on sale.  Whichever school of  thought you prefer, always consider if you need the goods or not, if you can find it cheaper elsewhere, and if you can spot a cheaper alternative that’s bound to be just as good.
  10. Resist temptation – Promotions, adverts, marketing.  You’re being sucked into a brand and led astray from the path of frugal living.  Watch the pretty colours and see why your life won’t be worth living until you’ve bought the latest in high-tech design, craftsmanship and quality, etc., etc.  Yes, life is full of temptation, but when you’re scraping the pennies together, now is the most important time to put your hands over your ears and shout “LA LA LA!” before it all becomes too much and you give in and buy the stuff you can’t afford.  You don’t need it.  Seriously, you don’t.  You don’t!!
The Big Money (by David D Muir)

The Big Money (by David D Muir)

8 comments

  1. Great article. Very helpful.
    About a month ago, I started writing down everything I buy and tracking where my money goes in a Journal on my computer. I’ve already started paying attention to what I purchase and what I don’t need to purchase. So helpful.

  2. Thanks, Jill. You’re absolutely right. Noting down your outgoings is just as good in a computer journal. Or a phone, for that matter. So long as it’s logged somewhere regularly.

    I hope your journal helps you save some money in the long term.

  3. Nice read. You’ve noted down quite a few points which we ignore to follow even though we know that in the back of our minds, they make more sense.

    I’ve started noting down all of my expenses since about 6 months now and keeping track of how much money [to the nearest dollar :)] i have in my bank a/cs at any moment.

  4. That’s good to hear, Abhishek. I’m sure it makes a difference too. Whether or not you’ve changed your spending habits yet (kudos if you have made good savings from the exercise), at least it’s clear where the money goes each month and how you could be making savings in future.

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