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Welcome to Merin Talks Your Money, the Personal Finance edition of Merin Talks Money and these bonus podcasts.

We talk about the best strategies and making the most of your money.

I'm Maren zum Zepweb.

So here we are second week of September, back to school season for many of you listeners, So we thought that we would focus this week's Personal Finance episode on useful tips for your first year university students, or indeed directly for first year university students.

This is exciting times starting university, but it also comes with big financial responsibilities that most young people will be taking on for the very first time.

There are tuition fees at textburgs, there's accommodation, there's food, there's beer.

Managing your money is very different.

Cult and doing it right can make a huge difference to the long term experience.

Now, a lot of students go right into this without any real clear plan about how they're going to manage their money.

That means stress, It could even mean debt, and we all know about student overdrafts, right, So you've got to prepare and you've got to do it ahead of time, so to help us talk about the key things that you've got to look at in advance, we have invited Mark Schoffman, who is an award winning journalist who's written for The Times, a daily telegraphed, also for Money Week, Close to My Heart, and recently published a piece in The Independent called How to Budget and Manage Your Money.

As a student.

Mark, Welcome and thank you for joining us today.

Thanks for having me.

Now, possibly the most important bit at the beginning of this is a conversation between parents and students that we're not going to dwell on this week because we have done a whole personal finance episode on it previously, the link for which is in the show notes, and that is about whether, if you can afford it, you should take on your kid's fees, and whether you should pay them or give them extra bugget money towards maintenance, et cetera so they don't leave with debt.

That is a big conversation we've had it before.

And the conclusion, I'm afraid as well, I don't know it depends, but do go and listen to it because I do think it's useful.

But that out of the way, the next most important thing is to think about if you are taking out the loans, how much you should take, how much you can get, and then how much you should actually take.

And that depends partly on where you live, doesn't it Mark.

Yes, indeed, so there's a few different factors where you live, I guess, Yeah, the university you're going to in the course, and whether you're studying full or part time.

There's two different loans.

So first of all, you're going to have your tuition loans is going to cover your tuition fees, which is the course costs.

The bad news if you're starting a new year as an existing student or a first night student is they've gone up this September by two hundred and eighty five pounds to a maximum of five hundred and thirty five pounds a year, and I think that's split into three terms.

So you've got a factory that cost that budget about twenty eight thousand and six and five pounds to budget over the next three years at least.

The good news is you can get a tuition fee loan to cover all of that, and that money goes directly to the university.

Yeah, you apply for that, it gets approved, it goes straight to the university.

You don't touch that money, you don't have anything to do with it except for that you owe it back.

Correct, yes, and then the other I guess bigger cost is going to be living costs.

Some you've got to pay your rent, you may have shopping books going out, all those cheap shots have to be paid for so you can get well.

You shouldn't be spending your mainsenance loan on this, but on alcohol necessarily.

But you can get a maintenance loan to cover your living costs at university now, unlike the tuition fee loan, but maintenance loan is means tested, so it will depend on the household income of the parents, and it also depends where you're living and if you're in London or outside London.

So the maximum you can get if you're living with your parents is up to eight hundred and seventy seven pounds, but if you're living away from your parents outside of London, it's up to ten thousand, five hundred four pounds.

Well, in London it's up to thirteen thousand, seven hundred and sixty two pounds, but that will start dropping depending on the household income of your parents.

What income is that where it starts falling.

Once a household has twenty five thousand pounds or more, it starts falling.

Save the big numbers are fifty thousand, three hundred and forty nine pounds, it starts dropping to three thousand, nine hundred and seven pounds if you're living at home, five hundred and twenty two pounds if you're away from home outside London, and eight thousand, six hundred and fifty five pounds if you're away from home in London.

It's a difficult one, isn't it mean it it assumes looking at household income, it assumes that you're not really an adult and you're almost definitely supported by your parents, which of course some people at eighteen or nineteen may no longer have that relationship with their parents.

But I guess that's another podcast.

Okay, So you apply for the money, is it a good idea to take all of it?

To take the maximum that you are entitled to?

I mean, we can look at that and we can say, well, you know, in the main probably most kids are going to need the maximum they're entitled to.

But there may also be other cases where perhaps you're working, or perhaps your grandparents are helping support you.

Perhaps your parents are helping.

Well, maybe you don't necessarily need all of it, in which case, I mean it might guess would be that you shouldn't take it because why would you take our unnecessary debt.

Other people might say take it all in invest in bitcoin.

Well, yes, you do have to pay it back, so that's something to consider, but you only have to pay it back once you earn about a certain threshold, which is over twenty five thousand pounds nowadays.

But I mean, Save the Student has some interesting data.

It says it costs sort of studiently be costs of one hundred and four pounds a month.

So even if you do take the full maintenance and as also children fee land is not going to cover everything you need to pay for anyway, so you are probably going to need to find some extra income elsewhere.

Now, in order to get your maintenance loan for the money to arrive, you need to designate a bank account for it to be paid into.

And one of the biggest.

Questions, and maybe you say it isn't the most important one, but the students in their first year it always seems like the most important one.

How do I choose a bank account because obviously, because we'll have a bank account.

But if you open a specific student bank account, you get to student perks.

So in the main you'll get some kind of voucher or cash bag or something, and you'll also get.

A relatively large, fee free overdraft, right.

Yes, So I remember when I was young, Yeah, my parents had opened an old Santandero or I have be a national account for me, and but by the time I got to university there was a whole new world of bank accounts to discover, full of discount railcards and I guess takeaway vactors.

Yeah, now and nowadays it's cash back, it's discounts on streaming platforms.

But yes, worth shopping around for the best deals.

Have a look on comparison websites.

So I think Lloyd's Bank currently is offering one hundred pounds cash back and six months of delivery plus.

Because I guess when you're at university, many will also offer overdrafts, which will be useful for students.

But I guess it's a useful way to learn about money as well, because you don't want to fall too far into our overdraft.

You want to make sure that your expenses aren't too much, that you're going into too much, and that you're not paying maybe not going too far into her overdraft, so you end up paying interest for unauthorized withdrawals and spending.

Yeah, I mean, it always seems to me that having a big overdraft is important.

A big free overdraft facility is really important because you might end up using it.

But of course the key thing is you really you don't want to use it.

You don't want to use it, but it should be there, and so maybe it is one of the main criteria for looking for a bank account.

And if you look through the best buys at the moment, you can get zero p cent overdraft up to five hundred pounds a month want six, one thousand pounds seven to nine, up to fifteen hundred pounds from ten to twelve and then on and then up to two thousand pounds in year four to six and not quite as big as I thought.

But nonetheless you have kind of keep qualifying for it, I guess, by sticking with the account and having your main nance loan paid into it.

And then there is there is the cash.

So as you say, quite a few of them offering one hundred pounds in cash and then sent HANDRA is offering the rail card.

Yes, which seems like a pretty good one to get.

Definitely, if you're living away from home, it's going to be the most useful perk of a student account because it makes trouble cheaper and we wont know how much rail fairs are.

Yeah.

When I was looking at this, I was thinking, well, would I prefer to have a rail card over through a four year period or one hundred quid upfront, which seems to be basically what you're choosing between with these accounts.

And I still think that I would go for the rail card because one hundred quid you can drop them in the pub in five minutes and forget you ever had it.

But a rail card every year for four years seems like something worth having something longer term.

Yeah, I guess it's spent.

How much you want to go home and see your parents as well?

Fair?

Okay, I guess there's washing today.

There's always watching to do and parents will do it for free, or I will, I will, I'll do it for free.

And then there is the there are the vouchers, and so quite a lot of the accounts at the moment are offering vouchers, delivery vouchers or just eat vouchers, and I was looking at that and thinking, I'm interested in your opinion on this, and just thinking, well, if you look at those, mostly you don't get them in a wanner, so you don't get a one hundred quid of voures at the beginning.

You can just go and you know, spludge on something.

You get them at ten pounds a month or fifteen pounds a month or something like that, which of course means that you're going to spend that ten but you're almost definitely going to spend more every month, right, Yeah, So that feels to me like a negative rather than a positive, because it's just going to encourage you to spend more.

It's going to encourage you if you don't have one already, to set up a delivery or a just eat account, and then you know what's going to happen.

You're just going to keep using that, and those vouchers will have created a new spending habit for you that maybe you should never have had in the first place.

I don't know, just to view what do you think?

Yeah, no, exactly, and then you're getting into the holishe of budgeting and potentially running out of money.

Healthy eating as well.

You don't want to just live live on takeaways at university.

It's important to develop good financial and culinary habits.

I guess yeah, okay, well let's move then from student bank accounts.

I think we've established what you should be looking for in those onto how do you budget?

What are you budgeting for once you arrive at in university and how are you doing that?

I guess it's spins where you're going to live.

If you're going to live in a student in a student halls, everything like furniture is going to be provided.

But then if you're in a shared house, you're going to Yeah, you need to furnish it needs think about bedding, and then there's going to be groceries, electronics, food books.

A lot of experts say, don't rush.

There could be this big rush to buy loads of pots and pans for when you're moving in.

But if you're going to go into a shared halls or a shared house and everyone brings pots and pans, you could end up with ten or twenty pots and pans and you're not going to cook that much past us, So it may be worth waiting until your child gets university and then deciding what goods are needed.

Yeah, and then it's also worth once you get your student card and maybe waiting till you get your student card, just presenting a very possible opportunity, right, because there are discounts all over the place for students.

Sometimes I look at them and I.

Think, why why don't they get literally everything with a discount, all for free?

But they do.

So you know you should take that card and you should use it as much as possible and go everywhere looking for a discount, right of course.

Yeah, so yeah, you get discounts.

Yeah, once you get a student card from a national union students, and you can look on websites such as UNI days and student Beans Save a student men may at least list places where you can get discounter goods and days out, so it's worth shopping around.

So we've talked about how you should budget, what you think about spending on, how did you get an account, and how to figure out how much money to take, etc.

But there's one thing that we haven't looked at, which is how important it is to just keep a little money aside.

I mean, I remember from my own student days how exciting it is with that money arrives, it's very hard to make sure that you've got enough put aside should you have.

An emergency your bicycle stolen, for example.

So I'm sure I have as a student every five minutes putting aside in an emergency fund.

That seems like an important start.

Right, Yes, I guess the rule in when it comes to managing your finances when you're earning a salary is to have three to six months put aside.

For students, obviously you're not going to be adding any money or unless you do get a job, so you need to work out what your bills are, and we have the cost of the goods you have and has had money set aside as you say, for those emergencies and unexpected expenses that you mentioned.

But then there are apps that help set money aside and budget So I think Starlink Bank has a budget plant app which helps you set money aside.

You can set up your Excel spreadsheet or maybe it's maybe even a good use of chat GPT.

Finally something good that AI can can help with.

Yeah, and the only other thing I would say, I don't know what you think about this, but in the main.

There's a lot of inertia in bank accounts, right, So we talk a lot about how important did it is to look at the perks, look at the overdrafts, to look at the cash you might get back.

But there's also maybe a sense that you should think about the fact that you might.

Have this bank account for thirty years.

I actually had my Lloyd's student account that then turned into atually into a graduate account.

I have that same account for twenty five years or something.

For the irritated me so much I moved, So it's worth thinking about whether that's the kind of institution you have your account with over the very long term as well.

Yeah, I think the customer nurse is a big issue, and there may be decent pokes to join now, but in three years time, Log's bank may not necessarily be the best bank for your Santander.

So you'd remember to keep shopping around, look out for cash back deals and extra perks for once you graduate, because I guess, yeah, once you're older, it may not be just eapbautch Is.

It may be savings interest that interests you.

Yeah, and can you swap account while you're at university?

I mean, let's say you get to the beginning of your second year and you look around, you're like.

Oh, look at that the two hundred quid on offer over there.

Can you get those deals?

No?

You can't.

No, you've got That's the whole point.

They don't.

No one wants us chopping and changing all over the blaze and taking on a hundred quid trice.

You're going to only normally get a student account with those perks and benefit in your first year, right.

Mark, Is there anything we haven't covered that you think is important?

Guess the only thing we have is when you're kind of shopping around for deals, it's not just a discounts, it's looking at apps and kind of chrome extensions such as Camel Camel Camel and id love, which help you track prices so you make sure you're getting the best deal.

Don't always buy new things like vinted, gum Tree, eBay, Facebook, Marketplace the great places to buy secondhand goods.

There maybe old students who who've graduated and want to get rid of their old books and you can get their old.

Notes, get their old notes.

You know, were not necessarily cheating, but seeing how other people have revised, I would recommend cheating to cheap.

Okay, that's a bad thing to end.

No, don't do that.

That'll be terrible.

Out of this podcast.

So do open a bank account.

Do think carefully about how much of a loan you get.

Do talk to your parents if you can make them pay anything up front for you.

The less date you have, the better.

Do budget carefully.

Do not consider your overdraft to be your emergency account.

Do not spend all your loan the second you get it.

Freshest week is only the first week.

I think that's the main pieces of advice that I have, any one main piece of advice from you, Mark.

Before we finish, I guess just enjoy it, but not too much.

It'll be your first taste of independence, but not too much yet.

Brilliant Mark, Thank you so much joining us today.

Thank you very much.

Thank you for listening to this week's Merin Talks to Your Money.

If you like our show, rate review and subscribe wherever you listen to podcasts.

This episode was produced by some Asidi production support by Moses and Dum.

Questions and comments on this show and all our shows always welcome.

Our show email is Merry Money at Blomberg dot net.

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