We all know that flying the nest to head off to University is, for many, an adventure away from home. Almost half a million first-year students packed their bags this year and waved hello to new-found freedom and a seemingly carefree life. But, away from the comforts and structure of home, it can be hard to adjust to joining the ranks of being ‘grown-up’, especially when it comes to the responsible or boring tasks like organising your money.
The best thing about Uni: nobody tells you what to do; the worst thing about Uni: nobody tells you what to do. Life ahead can seem like one big party, until you open the purse and find nothing but mothballs. In at the deep-end, budgeting can definitely a problem, especially if you’ve never had to manage money for yourself before.
Living at home you don’t have to consider things like food shopping, cooking or washing and many single out budgeting as the biggest challenge since living away from home. So, if anyone thought that the bank of Mum and Dad would close its doors once the kids had left for Uni, the bank remains very much open for business, to help their offspring with their finances. Willpower alone does not in fact increase your funds.
Credit cards and overdrafts are commonly used as ways to cope with money shortages, but a recent survey by money advice charity National Debtline has found that young people are instead turning to friends or relatives, rather than their bank, when they are strapped for cash. Two thirds of 18 to 24-year-olds turn to family or friends for financial help – with parents the most likely to be asked – and borrow on average £2,285 each year during their time at university.
There is a true sense of empathy for the forty per cent needing the money to cover basic expenses such as food, rent or travel – more so because students finish Uni with almost £45,000 of student debt. However, we’re not sure people will feel the same of the 67 per cent who turn to mum and dad because they’ve used their student loan to splash out on frivolities or the the sixty six per cent who are spent up because of shopping trips and the thirty per cent who used their loan for holidays.
Much of this may come down to an utter lack of money management skills, with sixty nine per cent of students saying that they were taught insufficiently about finance and were ill-prepared for student life. While no one ever truly feels like a fully-fledged adult who 100 per cent knows what they’re doing, a stricter budget plan in the run-up to each term though might help, especially the one in ten students who blew just over £2,700 of their loan in the first fortnight of the first term.
It's little wonder that the bank of Mum and Dad is so regularly called upon – but at a cost to them? Parents, it seems, are expected to cover the shortfall, which inevitably puts them under increased pressure with fifteen per cent having had to borrow money or get in to debt and fourteen per cent having taken a second job or delayed early retirement.
With the cost of a degree the reason why Brit’s don’t want to attend university and also why the majority drop out mid-course, understanding how finances work and learning to budget better will invariably help alleviate stress and further pressure. You can find out how to budget and save money while studying and help your student loan go further with student budgeting tips and a budget calculator from UCAS (Universities and Colleges Admissions Service).