Principality. Where home matters.
17 July 2017
This is what graduates can do right now to keep their finances in check
They're about to enter the big wide world - but finances needn't be so much of a worry for graduates who follow these handy tips.
Graduation season has well and truly started all over the country, with thousands of students picking up their hard-earned degrees after three or more years of studying. However, life after university can be a daunting prospect for students - especially when it comes to managing their finances.
So whether the next chapter involves more studying, a new career or travelling the world, there are some simple things graduates can do right now to make a head start on keeping their finances in check.
Here, Principality Building Society's Senior Savings Product Manager, Morgan Miles, takes you through them.
1. Tie up any loose ends when you move out of your university ‘digs’
For many students, moving out of their university house for the final time can feel like the start of the next chapter - but the last thing you want to be leaving with is a stack of unpaid bills. Remember to take a final reading on your electricity meter - Then, let your provider know that you’re leaving, ensuring any outstanding bills have been paid. Resolve your deposit - When the final person has moved out, your landlord may inspect the property, running through any inventory that was completed at the start of the tenancy. This is your opportunity to obtain the refund of your deposit - Since 2007, landlords have been required to put your deposit in a government-backed Tenancy Deposit Scheme (TDS). If the landlord makes a charge for wear and tear in the house, ask to see a copy of the inventory and costs incurred so you can check they’re fair. If you’re in dispute with your landlord, the deposit remains safe in the TDS while you resolve it. Once you’ve agreed how much you’ll get back, you must receive it within 10 days.
2. Double check your overdraft limit and avoid hefty charges
Without the security of the next student loan instalment and often without a permanent job to head to straight after graduating, many students can find their bank balance sneaking worryingly closer to their overdraft limit. It’s important to avoid going over your overdraft limit. If you do, it could result in charges, which can be as high as £15 per card transaction, and it can become a vicious cycle that is difficult to escape. If you're struggling or have any concerns, talk to your bank who should be able to help you, but it's likely to be far better to plan and budget where possible to avoid this happening.
3. Switch to a graduate account
Once you finish university, it might be time to consider switching your student account to a graduate one. However, realistically it’s not always possible for graduates to pay off their overdraft in the first year out of university, but the sooner you can do this the better. These accounts often come with perks - so it's worth doing it when you can.
4. Set a budget and keep to it
If you don’t have a set plan post-university, it can feel like an unsettling time. By setting a budget for the first few months at least, it will offer you a bit of structure to your finances and help you avoid any unwanted debt. To get your budget in order, consider everything from household bills or rent, living costs, travel expenses, leisure expenses and any additional costs. Life can be unpredictable so you might have to be flexible with your budget every now and then, but at the very least you can factor your incomings against your possible outgoings, helping you to avoid the red.
5. Ditch any unnecessary expenses
It's true that cutting back on your luxuries will be somewhat disheartening, but you'll appreciate the extra cash in your back pocket for all of life's necessities.
These are just some of the, often expensive, extra monthly outgoings you might want to give up in the short term:
- Music and film subscriptions - they can cost up to £12.99 a month
- Gym memberships - they can often exceed £35 a month
- Your car - it can often easily cost hundreds of pounds a month to run
Settling debts and bills, as well as creating a budget for yourself will help keep your finances in check for the foreseeable future before a permanent job comes along, allowing you to pay off any overdraft and start saving for things like travelling, a new home or anything else you have planned. Albeit daunting at first, this is the start of the rest of your life. Go get ‘em!