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Guest Post: Money Management Tips They Don’t Teach You at Uni

acasa

50% of students say they don’t understand the student loan they agreed to. It’s a shocking statistic, but not a surprising one: financial education only became compulsory in schools in 2014, years too late for the graduates who’ve already left university to enter the real world.

Uni is a big learning curve—and an even bigger financial investment. Given the costs of actually going to uni, not to mention the budgeting needed to get through it without living off a diet of instant noodles or a hefty overdraft, you’d think that universities would actively provide their students with financial advice. Right?

Wrong. In fact, most universities barely scratch the surface of money management. This might not be too disastrous if you’re a student in shared housing with an interest-free overdraft and exclusive discounts, but what about when you graduate? No more discounts, no more cheap rent, and time to pay back that overdraft. Then what? This post outlines some of the options out there to help you manage your finances after graduation.

Uni is a big learning curve—and an even bigger financial investment. Given the costs of actually going to uni, not to mention the budgeting needed to get through it without living off a diet of instant noodles or a hefty overdraft, you’d think that universities would actively provide their students with financial advice.

Bank accounts

Student bank accounts are a well-known perk of staying in education. What universities often fail to tell you is that these benefits don’t have to stop when you graduate: you can continue to enjoy the benefits you got with a student bank account by setting up a specialised graduate account.

Like student accounts, graduate accounts offer a zero-interest overdraft, giving you a chance to repay the overdraft you clocked up as a student without having to worry about any interest stacking up. As an earning graduate, this allows you to budget and pay off your overdraft without having to deal with the added pressure of having to pay off interest.

Already graduated? Don’t worry – you won’t have missed out if you didn’t set up an account the minute you finished your degree. More often than not, these accounts are open to anyone who has graduated within the past few years. Whether you’re fresh out of uni or your student days feel like a (far too) distant memory, you could be eligible for a graduate account, so it’s worth checking with your bank or having a look online to see what’s on offer.

Money management apps

At uni, you might’ve been able to get away with splashing out as soon as your student loan dropped. But in the real world, where your monthly spend is bound to be more than it was when you were studying, you need to budget. This is especially important if you have started paying back your student loan.

Money management apps are a very helpful budgeting tool. Whether you want to manage every outgoing payment against your monthly savings target or just want to keep track of your house utilities, these apps offer a very convenient way to take control of your finances.

Budget tracking apps such as Mint offer a comprehensive solution to help you track everything from your morning coffee to your rent or mortgage payments. The acasa app lets you manage, track, and split your monthly bills accordingly. You can also use it to track payments or to split payments on anything from the weekly food shop to a group night out.

At uni, you might’ve been able to get away with splashing out as soon as your student loan dropped. But in the real world, where your monthly spend is bound to be more than it was when you were studying, you need to budget.

Understanding debt

To most of us, “debt” is a scary word. Whilst it’s a state that we all try to avoid falling into, anyone who has been to university within the last few decades owes some amount of money. Not all debt is the same, however: some debts are considered “good” and others “bad.”

Good debt

A “good” debt is one which can be paid back in a manageable, achievable way. Any students or recent graduates reading should be relieved to hear that a student loan is a “good” debt. As far as debt goes, student loans are among the most manageable types: the amount you repay is relative to what you earn, meaning that you only pay back what you can afford. You won’t be expected to pay it back if you don’t earn enough to do so.

Bad debt

Credit cards, pay-day loans and overdrafts with interest all have the potential to be “bad” debts. This is because failing to pay them off comes with painful interest rates. Some pay-day loan companies even charge you interest just for borrowing money in the first place.

Needless to say, these options can be very dangerous: whether you’re earning or not, these debts have to be repaid. If you don’t pay back what you owe, the interest on your loan will continue to build until you are charged compound interest – in simple English, this means that you will be charged interest on the interest you already owe. This can cause your debt to spiral out of control.

It’s safe to say that you should avoid these kinds of debts at all costs (no pun intended). If you do end up using any of these financial options (life happens), then make sure you know exactly what you’re getting into: make sure you fully understand the terms and feel confident that you will be able to make the necessary repayments.

If you don’t pay back what you owe, the interest on your loan will continue to build until you are charged compound interest – in simple English, this means that you will be charged interest on the interest you already owe.

Do your research

If you get a graduate bank account, repay any outstanding overdrafts, and manage your spending, you should stay high and dry. You should also have enough spare income to fund the odd shopping spree, add to your savings or treat yourself to a well-deserved holiday!

 
This post was written by Sam Wright, Content Writer at acasa, and edited by Grace Dillon, Content Writer at TalentPool.