Journalist and Writer
Hilary Wilce specialising in all aspects of education
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You're In Charge Of Your Cash

Published By: The Independent - 20 Aug 2012

Money matters – and never more than when you’re starting out in life -- but sometimes it can all seem overwhelming.

“Oh my God!” remembers Sophie Richmond, now a 23-year-old teacher, “that first time you get your student loan in your account! You’ve never had such a big lump of money in your life and the temptation is just to spend it, but that’s when you start to struggle and get into debt. And then there’s all these credit card people offering you free stuff, and trying to get you to sign up, and what you never realise at the time is that the things you do at this stage of life affect what happens later. A friend of mine is sure he lost a job in the Civil Service because, although all his exams were good, he failed on his personal background, and the only bad thing in his whole life is that he ran up a lot of student debts while he was at university.”

But if you can get on top of the basics from the start, you’ll never need to worry about things going out of control, either now or later.


Money experts tell us over and over again that this is by far the best way to keep on top of what’s happening to our money, so try hard to acquire an early habit. Write down what money you have coming in for the year, month or week – whatever works best for you – then write down all your essential outgoings such as student fees, rent, gas and electricity, council tax, TV licence, phone, travel, food, and basic clothes. Add these up, subtract them from your income and that gives you your disposable income. Take this and divide it by the number of days you’re budgeting for (week, month, year) and that gives you the pitifully small amount of money left to spend on all the fun things of life – drinks, clubs, fashion, sports, make-up and presents. That way, when you spend too much on some days, you’ll know you’ll need to spend a couple of days eating cereal in front of the TV to get on track again. The reward will be an absence of cold financial panic in the pit of your stomach, and the warm glow of satisfaction that comes with feeling you’re in control of life.


One of your first jobs as you head for university, or into a job, will be to open a bank account so check around for the best deal. But remember one thing here. However many free gifts they are offering, however much they smile and beckon you in, banks are not on your side. They are on their own side.. So weigh up your options carefully. If they seem to be offering a free overdraft facility check how much will be available to you, and how and when you will need to start paying back. A tiered interest-free overdraft facility is a good student option, as this limits what you can borrow in your first year – when the word ‘budgeting’ might as well be in a foreign language -- but rises later. And, student or not, everyone needs to check what interest will be charged on further authorized borrowing, and, even more importantly, on unauthorized borrowing. Otherwise you will find yourself paying huge amounts of money to your bank just for failing to keep your borrowing below the agreed limit.
If banks are not your friends, then landlords can definitely sometimes be your enemy. Whenever you rent a property, be smart and organised to protect your deposit and avoid eviction, and remember there are always people you can turn to if things should get sticky. For students, it will be the accommodation office at your university. For others it might be a charity like Shelter or the Citizens Advice Bureau. Be aware that although agencies can charge fees for finding you a property, these cannot be too high and you should challenge any you consider unreasonable. Also landlords must, in law, protect your deposit and tell you how they are doing so, They can’t run off and put it on the horses. Make sure there is an inventory, and take dated digital photos when you move in to show that the wardrobe door was hanging off before you arrived, and that deductions cannot be made from your deposit because of this damage. Equally, do your best to keep things in good condition. That impromptu party may seem like a great idea at the time, but could cost you a lot more than just a thumping hangover next morning. Remember you must pay for your TV licence, and that, although full-time students are exempt from council tax, part-time ones aren’t. And always make sure your name has been taken off any joint utilities’ accounts when you move out.
Credit and debt
The basic truth about credit cards is that they are good servants but terrible masters. On the one hand they can be useful for building up a good credit history – if you can show you that you have handled small amounts of borrowing sensibly, you will find it much easier to secure a major loan for a car, or a mortgage, later. Credit cards can also secure your rights on purchases better than bank credit cards. On the other hand, they can all too quickly spin out of control, and take you down with them. If you decide you need a credit card, make sure you understand borrowing rates, find the best possible deal, get your head round all the charges, stick to just one card, use it cautiously, clear your account each month and never use it to withdraw cash if you can help it.

Shop around and get money savvy
Whatever you’re buying, get in the habit of shopping around, reading the small print, comparing prices, and thinking through the long-term consequences. With phone contracts, for example, consider how much you will use your phone for texting, phone and internet and what’s the best contract for you. Is it pay as you go? Sim-only? Or pay-monthly? Every type has pros and cons, and it’s up to you to decide which is the best. If it doubt, check a good impartial source, such as the consumer organization Which. Apply the same principles to anything you do, whether it’s joining a gym or choosing a mascara. That way you’ll seeom discover the real, deep pleasure of being someone who’s in charge of their own life.