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8 Top Tips to Help Students Manage Their Money During COVID-19

8 Top Tips to Help Students Manage their Money During COVID-19

The coronavirus has caused 2020 to come to a crashing halt. As lockdown began, the economy took a massive hit, with the cancellation of festivals, the closing of non-essential stores and restaurants and the new social distancing requirements making public transport a no-go.

Unfortunately for some students, this also meant that they lost their part-time jobs. Although student loans continue to go ahead as normal, without this extra income, students have been struggling financially. In fact, a recent NUS report revealed that 80 percent of UK students are struggling with money due to COVID-19. 

So, how can students best manage their money during this period? Here are eight top tips.

1. Check your direct debits to prevent unnecessary spending

Check your direct debits

Monitoring the money leaving your account each month is one of the easiest and most effective ways to reduce your spending.

Perhaps you’re still paying for that magazine subscription you never use. Maybe you planned to end your app payment after the free trial was over but forgot. Have you remembered to cancel or freeze your monthly gym membership?

You can find out which direct debits are leaving your account directly from your online banking. Alternatively, try an app like smart-bill which will help you find and cancel unwanted subscriptions and track your monthly outgoings.  This is especially useful if you have multiple bank accounts.

You can sometimes freeze payments on services you aren’t currently using, such as your gym membership. This may cost you a monthly fee, but it will be lower than your regular monthly payment. You can then restart the payment when everything goes back to normal.

If you’re missing your gym hit, take a look at how students are staying active in quarantine. 

2.Use a money managing app

Use a money managing app

Online banking apps can be a major time saver when it comes to managing your money. They can help you budget, save and track your spending.

Monzo is a popular money managing app. Known for their fluorescent coral cards, the bank helps you easily split your money into bills, savings and spending money. You can easily open savings pots, where you can earn interest on your saved money. If needed, you can also set up an overdraft of up to £500 and loans up to £3,000.

Snoop is a free app which identifies ways to save money based on what you’re already doing. It is authorized and regulated by the Financial Conduct Authority. The app also takes note of the stores you shop in and will let you know if there are any voucher codes for next time. 

Yolt gathers information from your bank accounts and displays your spending history on charts so you can easily see what you’re spending. It allows you to earn rewards from various retailers and also compares your utility and insurance providers to help you save.

3.Pay your credit card on time

Pay your credit card on time

If you don’t repay your credit card in full by the end of the month, you will be charged interest on the value of purchases made on the card. You will also be charged a higher rate of interest if you withdraw cash on your credit card.

If you decide to repay the minimum amount on your credit card repayments, you will still be charged compound interest on the remaining amount and it may negatively affect your credit score, making it harder to borrow money in the future.

If you do need to borrow money, avoid credit cards. Zero percent interest overdrafts are the way to go.

4. Use your overdraft as a buffer

Use your overdraft as a buffer

If you have a student discount, you will usually be offered an interest free overdraft. This can be useful as a quick buffer if needed. Make sure to check your overdraft limit and if you have zero percent interest repayment. If you go over your overdraft limit, you will be charged heavily.

Although your overdraft can be incredibly useful in times like this, where you suddenly don’t have your usual income coming in, bear in mind that your overdraft is a loan and will have to be repaid. The overdraft’s interest rate will skyrocket after graduation, so make sure you pay it back before then if you can. 

If you can’t repay your overdraft before graduation, many graduate accounts also offer zero percent overdrafts, so see if you can switch to a graduate account which offers one.

5. Save money on your entertainment

Save money on your entertainment

Long gone are the days where you could pop out to the cinema and end the night with a few drinks in your local bar. Coronavirus-friendly entertainment is generally focused around your favorite streaming service, which although is generally less exciting, can be a very effective way to save money.

Recreating your restaurant food is a fun way to be creative and learn some new culinary skills. Although, if you do decide to give in and get the occasional takeaway, you will generally spend less than you would on a restaurant meal, as you can save money on drinks.

If you’re on a budget, here are 25 productive things to do while social distancing.

6. Be smart with your supermarket shopping

Be smart with your supermarket shopping

Supermarket shopping on a budget is fairly easy to do. Make a list of essentials before you go to the shop and make sure you stick to it. Always remember to check the cupboards before you go to see what you already have and try to resist those extra items at the tills.

Make sure you eat before going to the shop. Going food shopping while hungry is a sure-fire way to go over your budget. You could also try going to a lower price supermarket, which offer similar products for less.

When at the shop, check the reduced section for items that can be put in the freezer to eat later. Supermarkets tend to reduce items near the end of the day, and this can be a great way to save money.

Try own brand products, as you often can’t tell the difference, and many are made in the same factories anyway. 

7. Make an emergency budget

 Make an emergency budget

To make an emergency budget, you first need to make a note of any income you have coming in (including maintenance loans, grants and cash from parents) and then note everything you need to spend money on (such as rent, bills, travel etc.). Compare this with your actual bank statement to see what extra you’re spending your money on.

If this seems too daunting, download one of the apps we mentioned earlier, which will do most of the hard work for you.

Once you’ve identified what you’re spending on, you can start to compile an emergency monthly budget. Which of these things do you absolutely need to spend money on each month? What can you go without? Be brutal. Remember, this is your emergency budget, not a standard monthly budget.

When you’ve done this, you have a plan to fall back on if you ever fall short on money. It will also make you aware of where you can cut down on spending.

8. Check to see if you’re eligible for a larger student loan or a grant

Check to see if you’re eligible for a larger student loan or a grant

If your parents’ income has dropped by at least 15 percent since the coronavirus crisis began, you may be eligible for a larger student loan or grant.

Usually the amount you’re eligible for your student loan is assessed based on your parents’ household income from up to two years ago, depending on when you started university. 

If it has changed significantly, if you’re studying in the UK, you can apply for a Current Year Income Assessment. You will then able to claim the full amount you’re entitled to based on your household’s current income.

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Written by Chloe Lane
A Content Writer for TopUniversities.com, Chloe has a bachelor’s degree in Economics from the University of Reading and grew up in Leicestershire, UK. 

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