Student record

Student Money Lessons: 10 Ways to Cut Costs and Seven Basics of Finance

Written by: Sarah Davidson


Wherever students end up, paying for three to four years of study as an undergraduate costs tens of thousands of pounds.

As A-level students receive their results this morning, many will find out if they are heading to the university or college of their choice or have to go through compensation to secure a place elsewhere.

While the average debt for students starting their degree last year is expected to be £45,800 and only one in five graduates are expected to pay it all back, those starting higher education in September will face different student loan terms.

The House of Commons Library says under the new loan terms graduates will leave university with an average debt of £43,400 and 55% expected to pay it all back.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: ‘It’s tempting to think that once your child has passed their A-levels and entered college, the hard work of parenting is over.

“However, you have just gone from being a mum and dad to being a mum and dad bank and if you want to avoid a run on this particular bank over the next few years with prices rising so alarmingly, it is worth worth arming your offspring with all the financial advice they need to get off to a good start in their adult life.

Here are seven money basics and 10 money-saving tips for students preparing for the first week of September.

7 money basics for college students

  1. Withdraw your maintenance loan money from your account from day one. If you get this loan, you’ll be paid in just three installments each year, so there’s a real risk of accidental overspending. Some people immediately transfer enough money for bills and rent into a separate account, so they are never tempted to dip into money for essentials.
  2. Face the boredom of a budget. It may seem like a chore, but take the time to fill out a budget planner so you can plan out everything you need to spend. It’s incredibly difficult to know what costs you’ll face when you’re just starting out, and that’s where parental help can come in handy.
  3. Understand your overdraft. It is worth choosing an account with as high an overdraft as possible of 0%. However, you must be very clear what it is for. Don’t put it in the same bracket as your student loan and don’t think of it as money you can spend on whatever you want. This is for essential purchases if your budget goes awry – and you can never afford to go over the agreed limit. When you graduate, you’ll have to pay it back as soon as possible or you’ll end up paying exorbitant interest rates. This money is therefore not free forever.
  4. Be careful with credit cards. Your bank might just try to sell you one, and the minimum repayments will make it an easy way to afford what you want. However, if you don’t pay it back, you’ll rack up significant interest charges, and everything will eventually have to be paid back. If you don’t win anything, it will give you a real mountain to climb.
  5. Dodge store cards. They’re horribly expensive, and even if you sign up for a discount, you can easily be tempted to spend more than you can afford on things you don’t need.
  6. Take Buy Now and Pay Later seriously. It may seem like a free way to spread the cost, but it’s a debt. If you use it, you need to understand exactly how much you’re borrowing and the total of all your repayments. You also need to appreciate the consequences of missing payments – which in some cases will show up on your credit report. As with any debt, think before you buy. If you don’t really need it right now, you shouldn’t borrow to pay for it.
  7. Don’t forget the taxes. Check your council tax bill: students don’t have to pay, so if you’re a full-time student living with other students, you shouldn’t have to pay council tax. If you work, also make sure you pay the correct income tax. If you earn less than £12,570 a year you shouldn’t be paying it, so check your payslip.

Ten Ways to Cut Your College Costs as Prices Rise

  1. Be sure to sign up for everything you need, and nothing you don’t. If you’re covering your cell phone bill, broadband and media plans for the first time, think carefully about what you need. Don’t let the seller impose additional services on you, but don’t skimp either because when it comes to your mobile, exceeding your allowances is expensive.
  2. Take advantage of student discounts. Sign up on sites like Unidays and Student Beans to get online discounts. Then ask in store and check any website every time you buy. A lot of brands offer cheaper deals for students, including Apple, Amazon, and Spotify.
  3. Consider investing in discount cards. Among the most valuable are the NUS Extra Card and the Young Persons Railcard. Some parents are sending their children to college with both, and right now you can buy the train pass with just £10 Tesco Clubcard points
  4. Take advantage of the benefits of gifts. One of the best is Microsoft software, which is free for students, but there are plenty of online communities dedicated to finding free stuff and telling people about it – from Money Saving Expert to Save the Student, and HotUKDeals .
  5. Build cheap or free habits with your friends. Parties are extremely expensive, so rather than feeling like you need to spend to see your friends, plan regular evenings together or free activities.
  6. Learn to cook before you go – at least a few dishes. This is by far the cheapest way to get food.
  7. Sign up for supermarket reward cards, which will offer points and deep discounts. When it comes to spending the points, you might need the money from your supermarket purchases, but if you spend with “partners” you can get up to three times the value.
  8. Don’t be married to high-end brands and don’t just buy what your parents make. Supermarket own brands and budget ranges are a fraction of the price.
  9. Buy food in the evening – check when the local supermarket brings out the yellow sticker bargains, when prices are down to zero.
  10. Sign up at, where you can get ‘magic bags’ of food for a fraction of the full price at the end of the day. Use it with caution though. There are plenty of grocery stores on the list that can offer great deals, but there are also sandwich shops, and it’s always cheaper to make your own.