How freshers can get to grip with finances

Going to away university for the first time can seem daunting for a variety of reasons. It's also likely to be the place students get their first taste of what it's like to manage their own money.

Here's how you can make the grade when it comes to swotting up on financial know-how:

MONEY IS A MAJOR CONCERN

Money management is such a big concern among students that many freshers see it as more of an issue than how well they are likely to perform on their course, new research suggests.

Ranking a list of top concerns they had in their first year, two in five (40 per cent) students said that "managing my money" was a key worry, significantly higher than the one in three (33 per cent) who put "achieving academic success" at the top.

The study among more than 2,000 students aged 18 to 25 was conducted by the National Union of Students on behalf of student insurance provider Endsleigh.

Many young people are living in their overdrafts week in, week out, the research found, with just under half (49 per cent) of students with an overdraft saying they're always in the red, while more than one in four (28 per cent) regularly use their overdraft.

Worries about money management aren't only for freshers - more than half (55 per cent) of university students surveyed said they haven't made a plan for paying off their personal debts.

It seems underestimating the costs involved leads to pitfalls for many students.

While the majority of students claim that before starting university they felt either quite (45 per cent) or very (17 per cent) prepared, three in five (61 per cent) felt uni life was more expensive than they had expected.

START THINKING ABOUT STUDENT FINANCES OVER THE SUMMER

While starting university can seem overwhelming, spending some time over the summer making a money plan may help students get into good money habits, which could last through university and beyond.

Alex Jones, student spokesman at Endsleigh, says parents can also help, by passing on their own experiences of planning and budgeting: "There's still time to talk about money management before they head off to freshers this year. If you can help them to plan ahead by sorting a budget and organising things they tend to put off - like opening a good student account and getting any gadget and contents insurance they may need - they'll be able to concentrate on their studies, and you can relax that they've got a plan in place to manage their funds."

HOW STUDENTS CAN MAKE A MONEY PLAN

Here are some tips for students from Endsleigh:

:: Use budgeting apps. A wide range of mobile apps can help you manage your monthly spend. They tend to be simple to use and many are free. Understanding what is spent where will make a big difference to having the funds for outgoings that matter.

:: Talk about how you manage your money. Be open about what you're doing with your friends. Nearly everyone at uni is in the same boat, so if you need to swap a trip to the cinema for a cheap and cheerful movie night at home, they'll understand. But likewise, if things start feeling overwhelming, don't hide it. Talk to your parents or others close to you if you feel you're not in control of your money.

:: Set up direct debits for bills. If you've got regular outgoings, set up a direct debit to pay for it. Once you've got the essentials covered, you can enjoy that night out guilt-free.

:: Avoid nasty surprises with insurance. No one wants to be hit by a huge bill to replace a cracked smartphone screen or worse, having to replace a laptop that's been damaged by a spilled cup of tea. Accidents happen, so be prepared with the right insurance that protects your possessions.

:: Make small savings. Once you've worked out your monthly budget, see how much you can afford to put aside regularly. Even if it's only £20 a month, you'll feel much better when it comes to someone's birthday and you've got some money saved. Put a bit more away and you could be enjoying an end-of-first-year holiday with your friends.

HOW... CAN STUDENTS PICK THE BEST BANK ACCOUNT FOR THEIR NEEDS?

Students may need to look beyond their own campus and swat up to find the best deals, Rachel Springall, a finance expert at Moneyfacts.co.uk suggests: "As with any bank account, the best deal entirely depends on how someone uses the account for their daily expenses.

"Whilst students could be tempted by an account with perks, it may not provide them with the most cost-effective choice over the next few years if they don't make use of them."

Interest-free overdrafts can be a particularly attractive feature of a student account. Springall highlights overdraft facilities of £3,000 offered by Halifax and HSBC.

She cautions: "However, as with any bank account, it's worth noting that the biggest overdraft limits are not a guarantee as applicants will be credit checked, so having a good credit score is important."

Springall continues: "It's important for students not to assume that their campus branch will provide them with the best package for their needs, as this convenience could cost them.

"Instead, students would be wise to swot up on what's available to them and compare every incentive before they pick an account.

"Whilst living away from home and overseeing their finances may seem daunting, it's worth remembering that most banks and building societies now offer 'on the go' banking. Mobile apps and online access can mean a branch on their doorstep might not be as essential as they may think."

For those students who may need to travel often, Springall also highlights some incentives which could reduce the cost, such as a railcard available from Santander, or a coach card from NatWest: "It can be an expensive commute to visit family members or to fit in a mini break, so any savings to be made here will be highly attractive."

Springall also cautions students against the temptation to slip too far into the red: "A sizeable overdraft can be all too much of a temptation and it needs to be repaid when students graduate, so using it sparingly is important.

"There are some accounts which spread the overdraft facility to students over the years of their study, which can be a much more sensible option for some."

And after you graduate, it may be time for a re-think about who you bank with. Springall says: "Once students graduate they would be wise to compare the accounts available and not assume that their current provider would offer them the best possible graduate account."

POUNDNOTES

Financial fact: One in three card payments across the UK are now contactless, according to figures from trade association UK Finance.

COST OF A FAMILY HOLIDAY 'UP BY £462'

Research by M&S Bank reveals the cost of a family summer holiday has risen by an average of 11.4 per cent or £462 compared with last year.

But the study found there are still some destinations where holidaymakers may be able to find relative value, such as Bulgaria, Crete and the Amalfi Coast in Southern Italy.

With sterling down against a number of currencies since last summer, M&S Bank said it's important to look at local holiday costs.

CUSTOMERS CAN ACCESS MOBILE BANKING BY LOOKING AT PHONE

TSB is set to introduce iris recognition to its mobile banking app from September.

Using the Samsung Pass iris scanner, TSB's customers with a Samsung Galaxy S8 or S8+ smartphone will be able to access their banking by looking at their phone.

Carlos Abarca, TSB's chief information officer, says: "Iris recognition allows you to unlock your TSB mobile app with a simple glance, meaning all of those IDs, passwords and memorable information become a thing of the past."

MANY 'UNDER FINANCIAL PRESSURE WHILE COPING WITH A CRITICAL ILLNESS'

More than half (51 per cent) of people who have been diagnosed with a critical illness such as a heart attack, cancer or a stroke, say they faced a shortfall in their income, according to research from Royal London.

A third (33 per cent) of those who faced a burden on their finances from a critical illness cited higher utility expenses.

The most costly extra expense was having alterations to the home, which cost £1,764 on average.