Debt - Avoiding the student debt trap - 27/05/2008

Most students struggle to maintain above their overdraft limit for most of the time they are at university.

And with tuition fees as much as £3,000 this year and rental levels across the UK soaring, keeping on top of your money at university is more difficult than ever.

However, it is possible to avoid falling into the debt trap while at university.
Start by looking at your outgoings whether everything is absolutely necessary.

You may want to cut back slowly to start with, consider how several small, short-term purchases can be sacrificed for a more substantial or longer-term
A £1.50 cappuccino each day is over £30 a month.

No one expects you to turn into a hermit, but when you look at the bigger picture, it could be easier to give up small things to make a difference.

Think about what triggers your spending, it could be that you never have time to plan ahead or shopping is a treat when not studying. Aim to leave debit or credit cards at home when you only have cash. It’s much harder to part with and make you think twice.

Supermarkets provide plenty of opportunities to over spend. Make sure you write a list before you go. Never go food shopping when hungry always plan your meals, shopping for own brand products will help don’t always go for the buy one get one free will you really use the products available to you.

Check the direct debits and standing orders on your bank account. Research from Cahoot revels more then 80% of us continue to pay for gym memberships we no longer use months after we stop working out. Magazine subscriptions and mobile phone contracts also go unnoticed.

If your not sure what your paying for, as your bank for a list of direct debits and standing orders and check it regularly.

When you get your sweaty palms on your new terms student loan insurance or more likely when it hits your bank account, the temptation is so strong to hit the local shops or student union to spend it on food, and buying your mates drinks all night for a week. Don’t think about it and either put some of the loan into a savings account with good interest.

So next time think before you buy that music CD or that nice cup of cappuccino and see how much you can save rather than being in debt.

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