Credit Crunch - Student Guide

Credit crunch students

As you’re all well aware the ‘credit crunch’ has taken up a lot of space in the news for the last year and the entire nation, if not the world, is tightening the purse strings.

The implications of the credit crunch aren’t the same for students as they are for say a graduate looking to buy their first house on a relatively low salary with no savings.

However, it may be time for students to start looking at university with a little bit of savings rather than 3 overdrafts, 6 credit cards and a bank loan, so that when they leave university getting some money saved up for a house or whatever else the credit crunch is making life difficult to acquire.

So we’ve created a simple guide to avoid spending money unnecessarily:

Bring your own lunch in

A lot of students will try to avoid spending any extra time in the kitchen but buying your lunch out every day is likely to cost £5 or over a day.

Take this over the course of a 5 day week and a 40 week year and you’re looking at spending almost £1,000 just on lunches. Alternatively you can make your own sandwiches or whatever else you fancy at home and save about 60-70% of this.

Drinking and going out

Drinking culture is big in the UK and in no place is it bigger than in university. But just think about how much you may be spending a year on alcohol alone. Even a cheap night out will cost around £20 outside of London with an average night out being £30 - £40 if you don’t go to student venues.

Take 3 nights out a week and you’re looking at a minimum of about £60 a week. Work this out on a yearly basis and you’re looking at close to £2,500 a year on nights out. Now we’re certainly not recommending you don’t go out at all but maybe you could be just a little bit more frugal.

Even cutting your costs down by 40% could save you £1,000 a year. Even taking measures like turning up to clubs before they start charging entry can save a lot of money.

Give yourself a budget and stick to it

Figure out how much money you are likely to have coming in for the year and then decide how much you would like to save for the year. Then it’s a simple case of seeing how much you have to spend and dividing it by 52 to see how much you have to spend per week.

If you’d rather just calculate these figures for term time then you can do so but don’t forget you may have to pay rent and bills over the holidays.

Once you know how much you have to spend per week it makes it a lot easier to budget yourself. You could even take cash out at the start of the week and don’t use your card at all.

Use eBay or other online stores

Buying things online is considerably cheaper than buying on the high street for most things. Even food can be cheaper if you buy online although savings don’t always make it worth it. But things like technology, books, even clothes, are much cheaper to buy form sites like eBay.

Mobile phones

Mobile phone contracts average around £35 a month for a basic contract, throw in a few photo messages and calls to 0870 numbers and you’re looking at spending about £40 a month just on your mobile phone.

If you take a nice phone then you’re probably looking at an 18-month contract, which comes in at about £720 for the term.

If you are prepared to not upgrade your phone or buy your own basic cheap phone then you can make massive savings. Your £40 a month contract can be reduced to under £20 a month and the 18-month contract can be turned in to a 12-month contract, which works out at a total saving of well over 50%.

There are just a few examples of how to save your money whilst in university. As a student you may not realise how badly affected you may be once you graduate if you have a huge amount of debt to pay off outside of your government student loan.

If you can leave university with money in your pocket then you’re well on the way to not falling foul of the current credit crisis.

More Information

You may be eligible for a maintenance loan or a special support grants if you are struggling with expenses.