May Week is nearly upon us, and for students up and down the land it’s time for a party to celebrate the end of their studying days.
Whether your final university event is a glittering college ball or a £10 all you can eat buffet at the Dog and Duck, at some point you’ll have to face the real world. For many, the real world comes complete with debt, for some debt that runs into tens of thousands.
What’s the best way to cope? Your Money has some ideas.
Firstly, don’t panic or let it ruin your life. While it obviously has to be paid back at some stage, no-one is expecting you to become a hermit until you’ve wiped the slate clean.
Work out what you owe and where the highest interest rate charges are and use that as your starting point to pay off any loans.
Remember that unlike credit cards etc you only have to start paying a Student Loan back when you can afford it. For loans taken out before 2012, that means that a percentage is automatically taken out of your account when you start to earn more than £15,000. If you never earn that much, you’ll never pay it back.
And don’t forget that a Student Loan is the best value loan you’ll ever get your hands on, so don’t be tempted to pay it off early. Use any spare money to pay off other loans where the interest rate is much higher, or open a savings account.
Talking of other debts, one of the important things you need to do is to pay off all your outstanding university bills. Whether these include utilities, outstanding rent or a bar tab, don’t forget them.
Although they might seem insignificant now, in the long term they can damage your credit rating, which could cause you problems in the future.
Now you’ve moved out of university accommodation, where are you going to live? As retrograde a step as it may appear to be, don’t be too proud to go back home. With house and rental prices still extremely high, more and more graduates are returning to live with mum and dad.
Granted it’s not an ideal situation for anyone, but if it’s a choice between living in penury and misery and living at home, which one are you going to choose?
Now you’re no longer a student, a student bank account is no longer an option. Naturally, the bank you were with will hope you’ll stay with them once you’ve graduated, but don’t automatically assume that’s the best option. In this instance, loyalty isn’t necessarily a good thing, so be ruthless and move to the bank that offers the best account for your new financial situation.
Some banks, for example, offer graduate accounts with interest free overdrafts, which could be a tempting prospect.
And don’t be too proud to claim benefits. Just because you think you ought to be able to get a job with your shiny new qualifications doesn’t mean you’re not entitled to the same as everyone else.
By the same token, if you’ve managed to get a job, check your tax coding to make sure you’re not paying too much.
And finally, budget. Now you haven’t got your NUS card to get you discounts, things are likely to become more expensive. That could well mean tightening the purse strings a little more.
Don’t think your money off days are completely over. Cheap train travel can sometimes still be available and there are numerous money off vouchers to be had. Now more than ever you need to be a savvy consumer.
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