How to cope with financial problems as a student

Author : 24cash flow | Published On : 27 Apr 2024

9 out of 10 students have revealed in a survey that the soaring cost of living has blown up their budget. “Prices are going through the roof,” said Sarah, a 21-years-old undergraduate. “Basic necessities are available at a price when you are pushed on the brink of insolvency, and then in a couple of months, they rise again.” Some students chose to skip meals and leave heating off to accommodate their budget to the rising costs.

Another undergraduate student, Ryan, said, “It does not take much to break the budget. Accommodation costs are too high, and they can leave you in the red even before your term starts.”

While some students managed to qualify for instant cash loans to cover small expenses, more than 65% of participants in the survey said “loans do not cover their living expenses.” students are using overdrafts and credit cards and dipping into their savings to meet their essential expenses.

“I fear that I will get myself deeper into debt in the coming months,” said Emma, a postgraduate student at the University of Edinburgh. “Stuff like groceries and rent are not fitting in my budget, and I am taking out additional debt because student loans do not cover living expenses.”

How to cope with financial problems as a student

Financial stress is very common when you start earning money. A lack of money skills is one of the reasons why many students face financial hardships. Students are under a lot of stress due to an increasing rise in living costs. Thankfully, you can find ways to take control of your financial situation.

Prioritise costs

List everything you need to pay for in the next few months, from rent, bills, bus fares, and laundry costs. Now, you should reorder your expenses according to the priority. Essentials should be at the top, including doorstep loans from direct lenders, subject to late payment fees if not paid back on time.

You should aim to cover all your essentials from your budget. It also includes expenses that can come in later. Whittle down your spending further to be able to cover unexpected expenses as well.

Look to manage your accommodation cost

Accommodation costs quickly drain your money. At times, it becomes convoluted to manage with it. If you are running into trouble with your housing cost, seek emergency funds from your university. Talk to your landlord in case you do not get enough support from your university to address your concerns.

They may offer you rebates and cut rents. However, not all landlords will be willing to help you. Make sure you do not stop paying rent unless you are advised to do so. Talk to your students’ union to know your rights and how you can deal with this problem.

Borrow judiciously

You might need to borrow money to get by, but make sure to use the best and safest loans for your financial well-being. First, you should consider taking out university loans. They are much more affordable than private lenders’ loans.

Credit cards should come in handy, but they are subject to risks, too. Students struggling to be on top of their finances will find it all the harder to pay off the credit card balance. Avoid payday loans as they charge outrageously higher interest rates.

Take into account the consequences of owing a debt. You will suffer the consequences due to late payments and defaults. Compare the total cost, which includes interest and other charges. Check if your budget has the capability to pay off the debt on time without compromising on your essential expenses.

Create a budget

It is essential to keep tabs on your expenses, and you cannot do it without creating a budget. Emergency expenses can get in your way, so make it a priority to stash away money to meet them. With the help of a budget, you can easily check how much money you have already spent and how much is in your pocket.

If you use your credit card to make some transactions, include that account in your expenses so you have clarity on how much money is exactly left in your pocket that you can use. Set aside the money equivalent to your credit card transactions to avoid running out of money when the bill is generated.

Set a spending limit every month and pledge not to cross that. Your budgeting app will let you gain an insight into your true financial picture. Because all transactions will be in one place, it will make it easier for you to track your spending. Set a new budget for every month as expenses of two months cannot be the same.

There are several budgeting methods, like envelope budgeting and bare-bone budgeting. Choose the one that suits your financial condition and goals. Experiment with all methods to better understand which one works best for you. You may have to switch between these methods to make your money work harder for you.

Find extra income

Grab a part-time job or freelance income to earn extra money. Additional cash coming in will help you meet your expenses easily.

First, you should use this money to cover the essentials such as rent, debt payments and emergency cushion.
University scholarships and grants are also available for undergraduate and postgraduate students.
Turn your house upside down to see if you have any stuff you do not need. Sell those old scruffy items. Unused books and gadgets and unloved clothes can be converted into money.

Have you got some points using your store card? Redeem them and transfer that cash to your savings account. Take advantage of cashback offers. Every tiny penny counts at this moment.

Use secondhand books and materials

There is no need to buy new books when you get secondhand books at half price. Sign up for a membership to your college library. You will get benefits such as renting books and accessing books for a week free of cost. You can use them to make notes for your future references.

Talk to your local bookstore to see if they can let you access secondhand books. Some bookstores also rent new books. Find out a way to contact past students to get their books at half the price. You do not need to buy new and expensive furniture for your accommodation.

Some stores sell secondhand furniture. Do research to get the best furniture at the lowest possible prices. Compare the furniture cost between local dealers and online retailers. Try to make do with what you have when you are on a tight budget. Keep only the most essential things. Do not brim your accommodation with dishes and furniture.

The bottom line

Financial life can be challenging for students, but the good thing is that you can take control of your finances with the aforementioned tactics. You should seek financial advice when you are in a tight spot. Loans can help you tide over, but check your repaying capacity. Seek help from your parents to find out if they can fund your needs. It is a better alternative than debt. You should carefully spend your money so that you can stretch your dollar until the month's end.