The study conducted by the National Union of Students on behalf of student insurance provider Endsleigh also found that young people are struggling to make their loans last as they live in their overdrafts.
Ranking a list of top concerns they had in their first year, two in five (40%) of students said that ‘managing my money ’was a key concern, significantly higher than the one in three (33%) who put ‘achieving academic success’ at the top.
Worryingly, one in four (25%) weren’t able to make their first student loan instalment last more than one month, while a full 7% claim it didn’t last them much more than a week, revealing a lack of basic budgeting skills among Freshers. This chaotic approach to money management is underlined by the finding that just under half (49%) of students with an overdraft say they’re ‘always’ in their overdraft, while more than one in four (28%) ‘regularly’ use their overdraft.
Worries about money management aren’t only for Freshers – more than half (54%) of all university students have failed to make a plan for paying off their student debts, while 55% have failed to plan for paying off their personal debts. While the majority of students claim that before starting university they felt either quite (45%) or very (17%) prepared, three in five (61%) felt that university was more expensive than they had expected.
The student insurance provider said it was calling on parents to talk to young people about money management before they head off to university.
Alex Jones from Endsleigh said: “Starting university can feel pretty overwhelming, and our research shows that a lot of students are unfortunately letting money issues get in the way of their studies, with many unable to budget properly or make a plan to manage their student or personal debt.
“There’s still time to talk about money management before they head off to Freshers this year. If you can help them to plan ahead by sorting a budget and organising things they tend to put off - like opening a good student account and getting any gadget and contents insurance they may need – they’ll be able to concentrate on their studies, and you can relax that they’ve got a plan in place to manage their funds.”
To help parents prepare young people for managing their money more effectively at university, Endsleigh has pulled together these top tips for Freshers.
Download a budgeting app and use it!
Sticking to a monthly budget is easier than ever before with a wide range of mobile apps that help you manage your monthly spend. All tend to be simple to use and many are free so try one out. Understanding what is spent where will make a big difference to having the funds for things that matter.
Talk about money management
Be open about what you’re doing with your friends. Almost everyone at uni is in the same boat so if you need to swap a meal out for a pot-luck dinner party or a trip to the cinema for a movie night at home then they’ll understand. But likewise, if things start feeling overwhelming, don’t hide it. Talk to your parents or guardians if you feel you’re not in control of your money.
Set up direct debits for bills
If you’ve got regular outgoings, set up a direct debit to pay for it. Once you’ve got the essentials covered, you can enjoy that night out guilt-free!
Avoid nasty surprises with insurance
No one wants to be half way through the semester only to be hit by a huge bill to replace a cracked smartphone screen or worse, having to replace a laptop that’s been damaged by a spilled cup of tea. Accidents happen so be prepared with the right insurance that protects your possessions.
Make small savings
Once you’ve worked out your monthly budget, see how much you can afford to put aside regularly. Even if it’s only £20 a month, you’ll feel much better when it comes to someone’s birthday and you’ve got some money saved. Put a bit more away and you could be enjoying an end-of-first-year holiday with your mates.