When going to university, there are many different life lessons that you will learn. A lot of these lessons are based on money management. After all, this is likely to be the first time that a lot of students have ever had to pay bills and manage their money effectively. This is how mistakes are easily made. With that being said, read on to discover some of the common money mistakes that students make so that you can avoid making them.
Failing to budget – There is only one place to begin, and this is with failing to budget. A simple budget is something that everyone requires. All you need to do is use an Excel spreadsheet for this. It should detail the money that you have coming in and going out every month. This will leave you with a good idea of the money you have available to spend so that you do not end up living beyond your needs and making a call to the bank of mum and dad.
Not being educated when it comes to student loans – This is one of the biggest mistakes that students make when it comes to money management. They often agree to a student loan with little consideration for the ramifications. However, you need to know exactly what you are agreeing too, especially as there are so many different student loans available today. If you have already made this mistake and signed up for an agreement that you cannot adhere to, head to refinancestudent.loan for more information. There are different solutions to help you out of this situation, and refinancing is one of these.
Abusing interest-free overdrafts – Many banks will provide students with interest-free overdrafts while they are at university. These can be very beneficial, but you need to make sure that you only use them for necessities. Once you finish university, interest will begin. The amount of interest and how this is applied will depend on your student account. For some student accounts, your interest will be charged on £500 in your first year after university, and then £1000 on your second year, and then it will keep going up until your entire overdraft amount is subject to interest. There are some banks that give you six months after university interest-free and then the charges begin. This highlights why you need to choose a bank with care.
So there you have it: some of the most common mistakes that students make with regards to money management when they go to university. There is no denying that this is a difficult albeit challenging time in any student’s life. After all, you are going to be independent for the first time. However, a little bit of research can go a very long way.
Image source: Pexels.com