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5 things students can teach YOU about money

5 things students can teach YOU about money

When you think of students and their money, it wouldn’t be a shocker if they were not very positive thoughts. Rather than saving, or managing their bills effectively, students are more likely to spend their loan on booze, takeaways and more booze. Right?

Well, no. We (The Money Advice Service) did a survey, asking students what their financial situation was and how they felt about it - and the idea that most students are reckless or bad with their money seems wrong.

Of course students face tough challenges when it comes to money. There’s not a lot of cash coming in, there are big things to pay for and there’s little financial experience - but that said, most students feel confident managing their money.

But are they better than us with their cash? Is there anything they’re doing which we can learn from?

Here are 5 things that students can teach you about money:

1. You’ve got to check your bank balance at least once a week

How often do you honestly check your bank balance? (And if you’re really having to rack your brain to come up with an answer, that’s not a great sign!). 

A lot of us will check our bank accounts when money is getting low, or you check to see how much is left at the end of the month, or if to see if you’ve been paid - but is it enough?

If you’re seeing what your balance is once or twice a month (or if at all), students are doing it better than you. Three quarters of students check their bank balance AT LEAST once a week.

You can check your bank a million times a day and that doesn’t mean that more money will turn up, or your debts will disappear - but you know where you are (and can spot mistakes quickly too!). Knowing what you have and what you have spent money on gets you started on the road to budgeting.

2. Feeling confident about managing money is important (even with little experience)

There’s nothing like talk of budgets, tax, or interest to make your average person start to stress or switch off. It can be scary dealing with finances and a lot of us just aren’t confident when it comes to maths.

You’d think that students might feel even less confident with money, as many of them have only just left home and have had parents looking after their finances and hardly any experience managing money, and yet, almost three-quarters of students (73%) feel confident managing their money with only 16% feeling unconfident.

So how can you up your confidence levels when it comes to money? The truth is that you can be good with money, even if you’re not good at maths. There are lots of tools out there which can do all the working out for you, so you can be confident in making decisions.

3. They set a budget

We’ve all heard a million times that setting a budget is the path to a less stressful financial life - but we get it, it seems like a faff.

Setting a budget is important and 59% of students set a personal budget with a whopping 83% keeping track of their personal expenditure.

If you were on a gameshow to win a million pounds, and your final question was ‘how much have you spent in the last week’? Would you be going home a millionaire, or do you have no clue?

In fact, would you be able to tell us how much you spent the last time you bought something in the shop (let us know in the comments!)? We need more than guesswork and memory to organise our money.

And it doesn’t have to be a painful experience either. We have a nifty budgeting tool, which doesn’t take long to fill out which will show you exactly what is coming in and out, and generally help you take control of your money. https://www.moneyadviceservice.org.uk/en/tools/budget-planner

4. They know how important it is to have savings

As skint as we know your typical student is, a whopping 77% of them have some sort of savings, typically in a savings account (46%) or an ISA (26%).

They recognise the importance of savings and 77% agree that saving money for a rainy day fund is either very or fairly important.

Two in five students say they save either every month (26%) or most months (14%).

Wonder what they are saving for? Holidays (42%), living expenses after graduation (39%) or a deposit to purchase a home in the future (31%).

New to saving money? Start easily with our Quick Cash Finder tool, which shows you where you can free up cash which you can stick into savings.

5. They have a rainy day fund

A rainy day fund is a bunch of money put away that if something went wrong (a boiler breaks, someone gets made redundant) it could tide you over until you get back on your feet.

You could argue that every day for a student, financially, could seem like a rainy day, but most of them have something put away.

If they had an unexpected bill of £300, which they had to pay within seven days, 37% of students say they could use savings to cover it while 33% say they could pay it without dipping into savings but it would mean them having to cut back on essentials.

So how much do you need? A good rule of thumb is to have three months’ essential outgoings available in an instant access savings account. So if you spend £1000 a month on food, rent, bills etc, you would have £3000 in savings that you don’t touch - just for when something bad happens.

Check out our Emergency Savings guide which will show you how to build up your fund, decide on the amount, and tell if you how much is too much.

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