A breakdown of student spending

A breakdown of student spending

Chances are, if you’re going to university, you’re planning to study hard in the hope of pursuing your chosen career at the end of it.

But the sacrifice many students have to make is paying high tuition fees, as well as rent if they live away from home during their course.

Even with the best intentions, such as sticking to a strict budget, many students will still find themselves out of pocket.

So it’s no wonder that 9 out of 10 students worry about their finances on a daily, weekly or monthly basis.

Here, we've analysed the real spending and saving habits of those at university. Find out if students really have enough money to survive month to month, and what you can do to make the most of your finances if you are worried about how you will get by at university.

For many students, being eligible for a student loan can be a huge relief. From nights out to study essentials and rent - we have broken down the different ways students are spending their loans and if they are spending within their means.

Student debt in the UK

When considered as a whole the scale of student debt in the UK is stark. While this type of debt can be considered 'good debt' as it increases an individuals job prospects and ability to earn in the future figures suggest total UK student debt is set to grow in the coming years.

Student debt statistics

Paying student debt is often front of mind when students graduate, however figures suggest as much as 83% of graduates are unlikely to fully repay their loans within the 30-year repayment period.

Student debt repayment statistics

Student loans

Students report that they receive an average of £2,094 from their student loan each term, and studies show they're spending an average of £894 each month. Within the average ten week term, that leaves a shortfall of £142.

Student spending in the shortest academic term vs their student loan

What students spend on

If students were to give up nights out, travelling back home to visit family, new clothes, gym membership, alcohol, eating out, and other social activities, they would save £550.68 per term on average.

Students could save £550.68 by giving up costs like socialising, the gym and new clothes

Students estimate they're spending an average of £112 a month on non-essential items. Research shows that it's actually £220 on average – nearly 2 times their estimate.

Students typically underestimate the amount they spend on non-essential payments

Other financial support for students

85% of students rely on additional sources of income outside a student loan to support their lifestyle. Of those, almost half (46%) receive money from their parents or family, while 42% have part-time jobs.

Other financial support for students

Having a part-time job while studying could help to make up some of the shortfall. 45% of female students have a part-time job to support themselves at university, compared to only 36% of male students, while 8% more women than men have a scholarship or bursary.

Female and male financial support

Student bank accounts & overdraft usage

When it comes to choosing a student current account, many students base their decision on the incentives on offer. But almost a third (30%) choose theirs due to the size of the overdraft.

30% of students choose their bank accounts due to the overdraft options

Unsurprisingly, 42% of students regularly dip into their overdrafts at an average value of £548, while 6% are more than £1,400 into their overdrafts.

Regular overdraft users

Students mostly use their overdrafts to buy groceries (61% of students), rent (48%), and bills (28%). But almost a quarter (23%) are also using them on nights out and 13% are spending them on clothes.

What do students spend their overdrafts on?

Student financial advice

As if passing exams and settling into a new city or town isn’t worrying enough, almost a third (30%) of students worry about their finances every day. A further 31% worry on a weekly basis, while only 9% never worry at all.

Student financial worries

Despite the financial anxiety only 19% of students who worry daily about money have sought any form of financial advice.

19% of students who worry about their finances have sought financial advice

Students believe they will leave university an average of £36,566 in debt. However, according to the Institute of Fiscal Studies, students are likely to leave university owing more than £50,000.

Students typically underestimate their post-university debt by £13,434

Money saving tips for students

1. Calculate your income

Knowing how much and where your money is coming from is the first step to saving money. Getting a firm hold of your expenses will give you an idea of how much you need to be putting aside each month for food and rent and how much you can comfortably afford to spend.

2. Overestimate your expenses

Some of us aren't organised enough to know the exact expenses of our day-to-day life,  however making a rough list of what you are spending on can help you save in the long run. Making a list of expenses like rent, travel, food or textbooks can help identify the  main outgoings. Overestimating how much you are spending is a good way to gauge how much money you need in day-to-day life and can help you stay on top of any pending expenses in the future.

3. Know what you need and want

Knowing the difference between a "need" and a "want" may seem simple, but it can be more challenging than you think, by making a list of needs and wants you can prioritise any urgent expenses.

1. Make a list of thing you want.

2. Make a list of things you need.

3. Rank each item 1 – 5 in terms of priority (1 being ‘high’ and 5 ‘low’ priority)

Listing costs is not intended to limit your spending but direct it to where it may be needed the most.

4. Cut down your travel costs

Travel in the UK can cost a lot - especially in London. As a student you are eligible to travel discounts by means of a 16-25 railcard through National Rail, which costs £30 and will save you 1/3 on all rail fares. Some banks provide this as a sign-up “freebie”, or you can apply for one through Transport For London (TFL).

5. Get an NUS card

The NUS card is something known among college and university students alike, giving students great discounts across the UK with a wide variety of brands like River Island, Superdrug, ASOS and National Rail. The NUS card is a great way to save money without limiting what you normally buy.

6. Choose your bank account wisely

Choosing the right bank to set-up your account with can have a direct impact on your savings. Most banks have specific accounts for students to help them save and manage their money, although some have sign-up incentives that others don't. The "freebies" that some banks give can include free memberships, travel discounts and discount cards.

7. Use your credit card wisely

If you have a credit card using it wisely can help manage your spending month to month. If using a credit card it’s a good idea to:

  1. Always think about how long it will take you to pay off.
  2. Pick a minimum and maximum amount you are willing/able to pay each month to manage credit card debt.
  3. It can be beneficial to be selective about what purchases you use your credit card for.
  4. Keep an eye on when you are supposed to pay off bills.

8. Shop for bargains

As a student, you will soon realise that the cost of living is very expensive - especially when it comes to grocery shopping. If you are looking to save money on your weekly shop, looking for reduced items and checking online for deals or discounts can help save pennies you might need in the future.

Visit our student budgeting guide for more information and advice for how to manage your money at university.

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Sources

OnePoll survey of 700 UK Students (July 2018)

www.thecompleteuniversityguide.co.uk/

www.slc.co.uk/

www.moneysavingexpert.com/

www.gov.uk/

www.ft.com/

www.ons.gov.uk/

www.thecalculatorsite.com/

www.savethestudent.org/

www.moneysavingexpert.com/

personal.natwest.com/

www.independent.co.uk/

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