My son will be heading to university soon. He is busy thinking what clothes he will need and making accommodation choices. Like most students, he will be managing on a limited budget. So we are having discussions around managing money and I came up with this beginner’s guide to managing money for him. I decided to share it in case it is helpful to my readers.
Ensure you get your entitlements
My son has applied for student finance. I wish a grants system was in place as it was when I went to university so that all students had reasonable life chances. Too many students from poorer backgrounds are put off applying for education in the first place. Whilst applying for student finance we realised you can get extra help if you have certain conditions or disabilities. It is possible my son is entitled to that help so he has applied.
I wanted to make the more general point to him and my readers that whatever stage you are in life it is a great idea to check out what you are entitled to. You will do far better at adulting whatever age you are if you know your rights when it comes to money, housing and employment. So I mentioned to my son that it is a good idea to check regularly whether you are entitled to any welfare benefits. There are also a heap of financial grants out there for all manner of things that are not promoted particularly well. Grants do not have to be paid back so can only help when it comes to your finances. Turn2Us is a great website that will calculate what you are entitled to money wise for you.
Even though I had a student grant and help from my parents, I still managed to get into debt when I was a university. I think this is because we had zero financial education at school. Also my parents never let me worry about money as a child or teenager so I got used to asking for things and getting them. It made me think things were that simple in the real world. So if a cash point would give me cash I did not question whether I was spending wisely. I just went off and bought whatever the desired object was at the time.
As my son has got older I have made him realise that you cannot have everything you want perhaps ever and certainly not in the moment that you want it. This seems to have worked well as he spends little and has managed to save a little too. Setting a budget helps so much because it means you are not going to end up with the stress of debt or a poor credit rating. If an unexpected bill turns up you will have allowed for unexpected needs and be able to deal with it without hurtling into crisis. If you can put just a little away into savings each week, it builds up and you can treat yourself to something lovely at some point without worrying about it.
You can find fantastic budget planners online or you can just write it all down on a document of your own whether that is on paper or in a spreadsheet. Check out budgeting apps and ask your bank if they have anything that can help you set up a workable budget. Make sure you have headings for your income and expenditure. Usually you will just have one or two items under income. There should be loads of expenditure items such as housing costs, fuel and water bills, food and living costs, insurance, travel and leisure. Leisure might include a little gambling so check out sign up offers which is a balanced comparison service for british betting sites and services created to assist users make informed consumer choices whilst enjoying the best offers. .I have told my son if he takes my advice he will keep a spending diary or at least work through his bank statements regularly.
Clever ways with money
There are so many tricks to manage your money better. The earlier you learn them the better off you will be. These include shopping around when it comes to things like mortgages and insurances to find the best deal for your circumstances. I think most of us know there are comparison sites for all manner of things like household bills these days so always make sure you are paying as little as possible to release funds for the more fun stuff in life.
Make sure you put some time into your financial education. Even if you spent 10 minutes a day on a good money website you can learn so much. There are also television programmes like the ones Martin Lewis does that make you financially savvy.
Be aware that anyone in business wants to make money. There will be clever marketing to get you interested in products or services. Make sure you really do want something and are not just falling for clever public relations when it comes to spending your hard-earned cash.
Dealing with debt
There are very few people who do not find themselves in debt at some point. Debt issues are usually caused by poor financial education or a sudden life change such as illness or unemployment. Sometimes people with mental health difficulties can use spending thinking it will help with depression. The best thing to do when you are in debt is to avoid putting your head in the sand. Remember it is a sign of strength to seek help. There is lots of help out there for free from charities such as the Citizens Advice Bureaux, StepChange and Christians Against Poverty.
I am really hoping my son learns from my mistakes and does not end up in debt. I think he if follows the guidance in this post he should be OK. However, I also know that if he does get into difficulties he will know where to turn for help.
What would you add to this beginner’s guide to managing money?