Even without the prospect of working extremely hard on your education, the prospect of getting by on a student budget still won’t exactly be a pleasant or easy one. It’s really not until any given student really gets into university living that it becomes apparent just how limited financial freedom can be when there is very little coming in and almost always something going out. Still, cold comfort can be taken in the fact that pretty much every student is in exactly the same boat unhelpful an approach to things as it may be.
The good news however is that with savvy spending habits and a proactive attitude, it is at least possible to make student funds go quite a bit further than they otherwise might. Perhaps more importantly, by steering clear of several rather common financial mistakes so many students make, keeping things at least modestly in the black becomes entirely more possible. And of course, it’s always preferable to learn from the mistakes of others, as opposed to making them yourself.
So with this in mind, here’s a quick look at five of the most painfully expensive mistakes thousands of students make every year and in all cases deeply regret doing so:
Poor Accommodation Choice
Some would say that there’s no such thing as a wrong’ student accommodation choice as personal preferences and circumstances vary enormously. This however is entirely inaccurate as whichever way you look at it, to choose accommodation you cannot afford is to make a very bad choice indeed. If for example you are on the lookout for suitable student accommodation in St Andrews, you’re unlikely to opt for somewhere you know you cannot afford. That being said, so many students every year dive into accommodation choices they can technically afford rent-wise, though at the expense of having so much as a penny left over at the end of the month. Never forget that student housing bills represent just one of the many expenses you’ll be facing as a student some of which are bigger and more demanding than you may be aware of.
Never fall into the trap of assuming that going a mere £5 beyond your overdraft limit isn’t a big deal. It might not be a big deal to you and it’s not exactly the kind of cash banks lose sleep over, but breaching these limits by so much as a penny can incur charges as hefty as £50, depending on your account. The problem is, banks deliberately make it as easy as possible for you to go overdrawn, no questions asked. So whether you have an arranged overdraft in place or no overdraft at all, it is definitely in your best interests to ensure you stay within its limits at all times.
Having never experienced the true horror of bounced bills, so many students walk headfirst into hugely expensive mistakes. Again, it might not be a big deal to you when a payment bill bounces as you can always simply make the payment again as soon as you find out. Unfortunately, by this time it is likely you will already have incurred significant penalty charges and perhaps additional interest charges to boot. There’s barely a provider on the face of the earth that takes kindly to bounced payments, so this is something else to keep a close eye on.
And it’s exactly the same case for late payments too as you’d be surprised just how expensive it can be to pay any of your bills so much as a day or two late. Along with quite colossal penalty charges and the possibility of interest rate hikes, it’s worth remembering that these are the kinds of minor oversights that could really do a number on your credit report for the indefinite future. You may have more important things to worry about right now than your credit score it will be a very different story in years to come!
Going Crazy with Credit
Last but not least, there are so many financial service providers on the market these days offering products specifically targeting students. From personal loans to payday loans to credit cards to hire-purchase and more, technically speaking it’s never been easier to get your hands on a pretty enormous pool of readily-available cash. Unfortunately, not only are these specifically targeted products and services usually bound by painfully high interest rates, but as a student you are inherently more likely to run into difficulties meeting the repayment terms. And when you do run into such difficulties, don’t expect any mercy expect instead massive penalty charges, ever-accelerating interest rates and the kind of credit score damage you might never repair. Suffice to say, it simply isn’t worth it.