As a student, focusing on the things that matter can be extremely difficult, because there is always plenty of entertainment and distractions. You might have a budget and are also trying different ways to spend less, but you probably don’t save. It seems impossible a student can actually put some money aside while studying.
We think it’s difficult, but there are certain ways to achieve this goal. The first question you should ask yourself is why. The answer is really simple. You can start working on the things that matter, like building an emergency fund, before getting a job, or preparing for the next cool holiday in Ibiza. This can give you an extra boost in the race to conquer financial freedom or an amazing goal.
A savings account is the best way to start. For this specific aim, you may want to open an ISA. There are different types of ISAs, but the one you want is an easy-access. This means you can put and withdraw money at anytime, as long as you don’t go over your limit for the year. The interest you earn is tax-free, which means no one, including HMRC and the Student Loans Company can touch it.
#1 – Set a budget
The first step to save money is to have a budget. If you know how much you can spend, you will be able to quickly figure out if you can afford to save. The math is really simple. If your budget is £40 a week and you spend £30, you can happily move £10 into your ISA account. Without a budget, you don’t have any control over your finances, which also means you can’t save.
#2 – Get a job
If you have received your maintenance loan, it doesn’t mean you can sit back and relax. Consider that as debt you will be paying off in the next thirty years and start building your liquidity today. The best way to get a job quickly is to look for opportunities within University. They are always hiring. If you are struggling and want some advice, see our list of jobs you can take at Uni. The best way to save as a student is to generate an income. That’s why a job is fundamental.
#3 – Ask family and friends
If your parents are not contributing towards your living costs, you may ask if they are interested in your savings. £30 a month into your savings account can make the difference. Depending on the length of your course, this sums up to £1080, after three years, and £1440, after four. We are not even taking into account the interest on top of that.
This is not a lot of money, but can give you some run rate, when you finish University. What if you don’t get a job right away?
#4 – Sell things you don’t need on eBay
We all have something we don’t use. Look into your things and find those you can actually sell online. Ebay is a starting point, but there are plenty other sites you can use. If you can get in the game of “buying for then selling to make a profit”, you have a business right there.
#5 – Give up on regular spends
Subscriptions are a killer as well as takeaway food. At Uni, it was a “thing” to buy fast food at 5am in the morning, after a night out. Did I really need it? Of course not. A bottle of water was enough to keep me alive and avoid stomach ache.
I wasted £60 in my first year of University because I forgot to cancel Netflix’s free trial. If you are in control, understand what you really need. Spotify and Netflix might be two things you can avoid.
When I was in Uni I was a little bit skeptical, but I managed to open an ISA account in my third year. In terms of interest, this was a great decision and I encourage you to take it into consideration. We are going to cover more ISAs in the next blog posts, so stay tuned. 😉