Does first time financing affect your future?

~ Written by Cyra Henson

Fear of financing is very common amongst first year students, sometimes it can be difficult to figure out when you're not used to relying on your own source of income. With many of us overestimating our ability to manage our money, sometimes it's easy to let it slip, and little momentary decisions often lead to bigger, more stressful problems.

When you get your first loan payment, it tends to feel like a lot of money and it's easy to view it as a lump sum, rather than the multiple payments it needs to be divided into. Many make this mistake, spending their funds too quick and swiftly blow through it all, leaving them stuck with very little until their next payment. By reviewing your funds, and splitting them into each month until your next loan, you'll already have a better foundation for managing your money.

While budgeting may sound boring and a lot of effort, there are a multitude of benefits to watching what you spend. By monitoring your cash flow, you are less likely to be caught out when it comes to serious things like needing to buy food or paying rent. Simply create a budget that works for your lifestyle, and stick to it. As student loan is received in three separate instalments, based on your term times, it is easier to structure your budget across those three time periods. Add up all routes of income including maintenance loan, salary, savings and any other sources to work out how much you have to budget with.

When it comes to creating a budget or finance plan of any kind, it's important to always factor in the essentials first:

Rent -

When it comes to essentials rent is high on the list, depending on your own housing arrangement this should differ yet most student accommodations or housing follow the same time period as your student loan ~ making it efficient to get your rent paid and out the way.

Bills -

Also circumstance dependant are your bills, whether its gas, electric or your Spotify premium subscription, making sure you pay off all bill on the correct days and having that money ready is vital to avoid unwanted debt.

Food -

Food will always be a key component to your essential payments, planning how much you plan to spend on food helps you save money and improve your general wellbeing. Find out more:

Transport -

With most of stoke campus being on the doorstep for a lot of the university accommodation, travelling to studies may not be bad, but when you start a part time job or even just get a little homesick, you're going to want to have a transportation budget there.

Course equipment -

Every course is different, and with it comes it's own list of requirements that you'll find yourself needing. Books, stationary and any specific equipment are wise to be purchased earlier on, so you aren't left with low funds and no way of accessing the tools you need to progress your learning.

Previous students gave me a overview of their first year at university, and how they coped with their spending; and what they would do differently now. Everyone has their own experience, and sometimes simply being thrown into the deep end is the best way of learning how to swim; but at the same time, having a pair of armbands guiding you isn't the worst thing. By reading the trials and errors of others, hopefully it'll help guide you during your own swim through the world or money management.

" When I started my first year at University, I was freshly 18. I had just discovered going out clubbing and hadn’t had a lot of financial independence previously, as all of the money from my part-time job was tied up in my car payments. So when my student maintenance loan was paid, and I got my first ever overdraft of £1000, I spent it like it was Monopoly money. I had a new outfit for a new club night every week, and before I knew it, I was going home at Christmas and having to explain to my parents why I had managed to max out my overdraft in a mere 3 months. Now, in the middle of my third year, with an over 50% reduction in my maintenance loan, I am working two jobs alongside my studies to finance myself. Reckless spending in my first year did not put me in good stead, and due to my unexpected reduction in maintenance loan, it has left me constantly in my overdraft, regardless of how many part-time hours I work. It took that harsh lesson to realise that I needed to be more cautious with my money. It’s okay to treat yourself, but when you’re eating away at your overdraft to go clubbing, it’s time to stop and ask yourself if it’s really worth it. I am grateful for the mistakes I made in my first year, as now I am able to manage my finances far more effectively, but I wish I had learned sooner. "

Eloise, 20 ( Biomedical science )

"I made an arrangement with my job when I left for university to still work during the holidays when I went back home, which along with savings from working the summer before I left, was enough to finance me by shopping cheap and smart even with a low rate loan in expensive accommodation. Yet I still didn't realise how quickly small purchases would add up, as getting an energy drink on the way past to lectures every day, sometimes twice a day, was slowly draining my bank account. I also got in the habit of ordering takeout too much as I wasn't great at cooking for myself, but managed to notice the amount I was spending and limit the amount I spent on takeout before it was too much."

Nat, 20 ( Computer science )

"In first year I didn't really understand the concept of budgeting, I see money as a thing that comes and goes and so I always thought as long as I have a little to keep me going I'm alright. This unfortunately meant within the first few weeks I'd blown the majority of my loan buying foods that I quite frankly didn't need and towards the end of the loan period I was mainly eating pasta based dishes. This kick in the face taught me I better budget if I want to eat well throughout the coming months. I began with dividing my income against the amount of days it should last me, this gave me an approximate expense limit per day/week, allowing me to do the weekly shop and potentially have spending money. The first shop will always be the most expensive as you will be buying meats and spices, although it may be more expensive at the time I recommend buying large packs of chicken for example, and freezing each breast individually, this way if you want a chicken dish you do not have to defrost an entire packet which in turn forces you to each chicken for the next 3 days. Instead you can take out a portion when desired, I found this meant I was spending less on meats as they would last longer”

Eve, 21 ( BA Fashion )

While it has it's ups and downs, and many experience it differently, figuring out your finances will always be tricky at first. Once you begin to find cheaper means to still enjoy yourself, it becomes a lot easier, and takes a lot of the pressure away. So keep this in mind when you find yourself at the start of your independent financial journey, and hopefully it will veer you towards making smarter, and important financial choices that'll help frame your future.