Levitate Student: Money Tips

Money Tips

Huge thank you to the fabulous students and graduates who submitted a Money Tip this week. 

Picture of student money tips

Suffice to say that most students we know manage their money well and wisely. Many maximise their student income and help from family by working, saving and sensible budgeting.

It's no mean feat budgeting on the periodic student income, planning ahead for all outgoings. For many students money management is a new experience, lots of first time expenditure like rent, phone and utility bills. It can be a challenge planning for the expected and more so the unexpected. 

Take a look at this useful budgeting tool provided by National Debtline

Many full-time Higher Education students can secure an interest free overdraft from the high street banks. When used sensibly this can serve as an excellent safety net on a bank account to help navigate through the cashflow peaks and troughs.

Be wise with the overdraft facility though - it can be tempting to over spend. You need to be honest with yourself about how smart you will be in using the available funds. The interest free limit though can provide a means for you to avoid interest bearing borrowing such as credit cards, store cards, personal loans, and short term high cost credit like Pay Day Loans..

Picture of student money tips

Many banks offer graduate accounts that give you a limited time to pay any residual overdraft back when your course ends.

Some students might want to use the interest free facility to put into interest bearing savings account such as ISA

But as bank interests rates are low and many students do not pay tax on bank accounts anyway (See tax form R85). It may not be safer to use the interest free buffer to help avoid the need for costly interest bearing borrowing. 

We like the Money Saving Expert Guide to Student Bank Accounts

A note of caution though sometimes students take more than one student account and find it difficult to manage. Taking more than one account is not against the law but might be contrary to the account terms and conditions so this should always be checked. Also it is important that bank accounts don't become dormant (not actively used) as banks may close them and ask for any overdraft to be paid back immediately.

Similarly, sometimes students leave higher education without graduating and find that as they are no longer a student that the bank would like the overdraft paying back right away. This can come as a shock and throw you into financial difficulties.

Always seek advice if you are struggling with money matters - your university may offer Money Advice, or look on our Know Where to Look  page for trusted debt advice agencies.