You are young, carefree, and have at last been let loose into the big bad world.
Having left your tearful mom behind, a whole host of fresher parties, pub crawls and perhaps an odd lecture here and there has begun! All is going swimmingly in fact, until you pay for that late night kebab on your card and it is declined. “How on earth did I manage to blow my loan in the first week?” you ask yourself as you nurse your tequila fueled hangover…
Now, of course, this is probably a slightly extreme scenario for some. But for many an entry into the adult world is also a time to start facing up to those dreary words you once used to drown out at the dinner table, such as debt advice and personal savings. However, if you act early then there are simple ways that you can control your funds, enabling you to leave college without having to pay back the equivalent of a small country’s national debt:
- Everyone knows that part and parcel of college is the student loan. But this is a loan that you will spend a lifetime paying off. In fact, it has been estimated that it takes the average post graduate 10 years to pay back. If you have savings, it may be a good idea to use that rather than having to pay off all that interest. (J: or perhaps part of it?)
- One of the biggest rules of debt management is to never borrow outside your means. Although student loans are far cheaper than other loans, you will still be paying off an interest rate for many years to come. Look realistically at the amount you need, a decision you will be grateful for in the future.
- Choose the right bank account. Several banks like to offer enticing freebies to draw you in but the most important thing to look for is the largest overdraft at 0%. This is far more attractive in the long run than taking up an account based on a free kettle and toaster! Use this overdraft wisely as the moment you graduate you will be stung on interest rates.
- Get a job! Working a couple of evenings or shifts a week will go a long way into relieving the debt that you are accumulating. An average wage for a bartender is $10 per hour. (J: Or how about being a Starbucks Barista? ;) ) With just 12 hours a week this is an extra $480 a month towards buying those Biology books.
- If times are hard, remember there is support out there. Charities such as Charities For Debt and Citizens Advice are at hand to give advice. Most universities will have a dedicated person within the student union as well that you can turn to for help – especially when it comes to managing your debt!
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MoneySolve are experts in debt management, bankruptcy and IVA’s. For many years, MoneySolve has helped people in the UK with their personal debts and getting their finances back on track.
