Speaker 1: Bloomberg Audio Studios, Podcasts, radio news. Welcome to Merin Talks
Speaker 1: Your Money, the Personal Finance edition of Merin Talks Money
Speaker 1: and these bonus podcasts. We talk about the best strategies
Speaker 1: and making the most of your money.
Speaker 2: I'm Maren zum Zepweb.
Speaker 1: So here we are second week of September, back to
Speaker 1: school season for many of you listeners, So we thought
Speaker 1: that we would focus this week's Personal Finance episode on
Speaker 1: useful tips for your first year university students, or indeed
Speaker 1: directly for first year university students. This is exciting times
Speaker 1: starting university, but it also comes with big financial responsibilities
Speaker 1: that most young people will be taking on for the
Speaker 1: very first time. There are tuition fees at textburgs, there's accommodation,
Speaker 1: there's food, there's beer.
Speaker 2: Managing your money is very different.
Speaker 1: Cult and doing it right can make a huge difference
Speaker 1: to the long term experience. Now, a lot of students
Speaker 1: go right into this without any real clear plan about
Speaker 1: how they're going to manage their money. That means stress,
Speaker 1: It could even mean debt, and we all know about
Speaker 1: student overdrafts, right, So you've got to prepare and you've
Speaker 1: got to do it ahead of time, so to help
Speaker 1: us talk about the key things that you've got to
Speaker 1: look at in advance, we have invited Mark Schoffman, who
Speaker 1: is an award winning journalist who's written for The Times,
Speaker 1: a daily telegraphed, also for Money Week, Close to My Heart,
Speaker 1: and recently published a piece in The Independent called How
Speaker 1: to Budget and Manage Your Money.
Speaker 2: As a student. Mark, Welcome and thank you for joining
Speaker 2: us today.
Speaker 3: Thanks for having me.
Speaker 1: Now, possibly the most important bit at the beginning of
Speaker 1: this is a conversation between parents and students that we're
Speaker 1: not going to dwell on this week because we have
Speaker 1: done a whole personal finance episode on it previously, the
Speaker 1: link for which is in the show notes, and that
Speaker 1: is about whether, if you can afford it, you should
Speaker 1: take on your kid's fees, and whether you should pay
Speaker 1: them or give them extra bugget money towards maintenance, et
Speaker 1: cetera so they don't leave with debt.
Speaker 2: That is a big conversation we've had it before.
Speaker 1: And the conclusion, I'm afraid as well, I don't know
Speaker 1: it depends, but do go and listen to it because
Speaker 1: I do think it's useful. But that out of the way,
Speaker 1: the next most important thing is to think about if
Speaker 1: you are taking out the loans, how much you should take,
Speaker 1: how much you can get, and then how much you
Speaker 1: should actually take.
Speaker 2: And that depends partly on where you live, doesn't it Mark.
Speaker 3: Yes, indeed, so there's a few different factors where you live,
Speaker 3: I guess, Yeah, the university you're going to in the course,
Speaker 3: and whether you're studying full or part time. There's two
Speaker 3: different loans. So first of all, you're going to have
Speaker 3: your tuition loans is going to cover your tuition fees,
Speaker 3: which is the course costs. The bad news if you're
Speaker 3: starting a new year as an existing student or a
Speaker 3: first night student is they've gone up this September by
Speaker 3: two hundred and eighty five pounds to a maximum of
Speaker 3: five hundred and thirty five pounds a year, and I
Speaker 3: think that's split into three terms. So you've got a
Speaker 3: factory that cost that budget about twenty eight thousand and
Speaker 3: six and five pounds to budget over the next three
Speaker 3: years at least. The good news is you can get
Speaker 3: a tuition fee loan to cover all of that, and
Speaker 3: that money goes directly to the university.
Speaker 2: Yeah, you apply for that, it gets approved, it goes
Speaker 2: straight to the university.
Speaker 1: You don't touch that money, you don't have anything to
Speaker 1: do with it except for that you owe it back.
Speaker 3: Correct, yes, and then the other I guess bigger cost
Speaker 3: is going to be living costs. Some you've got to
Speaker 3: pay your rent, you may have shopping books going out,
Speaker 3: all those cheap shots have to be paid for so
Speaker 3: you can get well. You shouldn't be spending your mainsenance
Speaker 3: loan on this, but on alcohol necessarily. But you can
Speaker 3: get a maintenance loan to cover your living costs at
Speaker 3: university now, unlike the tuition fee loan, but maintenance loan
Speaker 3: is means tested, so it will depend on the household
Speaker 3: income of the parents, and it also depends where you're
Speaker 3: living and if you're in London or outside London. So
Speaker 3: the maximum you can get if you're living with your
Speaker 3: parents is up to eight hundred and seventy seven pounds,
Speaker 3: but if you're living away from your parents outside of London,
Speaker 3: it's up to ten thousand, five hundred four pounds. Well,
Speaker 3: in London it's up to thirteen thousand, seven hundred and
Speaker 3: sixty two pounds, but that will start dropping depending on
Speaker 3: the household income of your parents.
Speaker 2: What income is that where it starts falling.
Speaker 3: Once a household has twenty five thousand pounds or more,
Speaker 3: it starts falling. Save the big numbers are fifty thousand,
Speaker 3: three hundred and forty nine pounds, it starts dropping to
Speaker 3: three thousand, nine hundred and seven pounds if you're living
Speaker 3: at home, five hundred and twenty two pounds if you're
Speaker 3: away from home outside London, and eight thousand, six hundred
Speaker 3: and fifty five pounds if you're away from home in London.
Speaker 1: It's a difficult one, isn't it mean it it assumes
Speaker 1: looking at household income, it assumes that you're not really
Speaker 1: an adult and you're almost definitely supported by your parents,
Speaker 1: which of course some people at eighteen or nineteen may
Speaker 1: no longer have that relationship with their parents. But I
Speaker 1: guess that's another podcast. Okay, So you apply for the money,
Speaker 1: is it a good idea to take all of it?
Speaker 1: To take the maximum that you are entitled to? I mean,
Speaker 1: we can look at that and we can say, well,
Speaker 1: you know, in the main probably most kids are going
Speaker 1: to need the maximum they're entitled to. But there may
Speaker 1: also be other cases where perhaps you're working, or perhaps
Speaker 1: your grandparents are helping support you. Perhaps your parents are helping. Well,
Speaker 1: maybe you don't necessarily need all of it, in which case,
Speaker 1: I mean it might guess would be that you shouldn't
Speaker 1: take it because why would you take our unnecessary debt.
Speaker 2: Other people might say take it all in invest in bitcoin.
Speaker 3: Well, yes, you do have to pay it back, so
Speaker 3: that's something to consider, but you only have to pay
Speaker 3: it back once you earn about a certain threshold, which
Speaker 3: is over twenty five thousand pounds nowadays. But I mean,
Speaker 3: Save the Student has some interesting data. It says it
Speaker 3: costs sort of studiently be costs of one hundred and
Speaker 3: four pounds a month. So even if you do take
Speaker 3: the full maintenance and as also children fee land is
Speaker 3: not going to cover everything you need to pay for anyway,
Speaker 3: so you are probably going to need to find some
Speaker 3: extra income elsewhere.
Speaker 1: Now, in order to get your maintenance loan for the
Speaker 1: money to arrive, you need to designate a bank account
Speaker 1: for it to be paid into.
Speaker 2: And one of the biggest.
Speaker 1: Questions, and maybe you say it isn't the most important one,
Speaker 1: but the students in their first year it always seems
Speaker 1: like the most important one. How do I choose a
Speaker 1: bank account because obviously, because we'll have a bank account.
Speaker 1: But if you open a specific student bank account, you
Speaker 1: get to student perks. So in the main you'll get
Speaker 1: some kind of voucher or cash bag or something, and
Speaker 1: you'll also get.
Speaker 2: A relatively large, fee free overdraft, right.
Speaker 3: Yes, So I remember when I was young, Yeah, my
Speaker 3: parents had opened an old Santandero or I have be
Speaker 3: a national account for me, and but by the time
Speaker 3: I got to university there was a whole new world
Speaker 3: of bank accounts to discover, full of discount railcards and
Speaker 3: I guess takeaway vactors. Yeah, now and nowadays it's cash back,
Speaker 3: it's discounts on streaming platforms. But yes, worth shopping around
Speaker 3: for the best deals. Have a look on comparison websites.
Speaker 3: So I think Lloyd's Bank currently is offering one hundred
Speaker 3: pounds cash back and six months of delivery plus. Because
Speaker 3: I guess when you're at university, many will also offer overdrafts,
Speaker 3: which will be useful for students. But I guess it's
Speaker 3: a useful way to learn about money as well, because
Speaker 3: you don't want to fall too far into our overdraft.
Speaker 3: You want to make sure that your expenses aren't too much,
Speaker 3: that you're going into too much, and that you're not
Speaker 3: paying maybe not going too far into her overdraft, so
Speaker 3: you end up paying interest for unauthorized withdrawals and spending.
Speaker 1: Yeah, I mean, it always seems to me that having
Speaker 1: a big overdraft is important. A big free overdraft facility
Speaker 1: is really important because you might end up using it.
Speaker 1: But of course the key thing is you really you
Speaker 1: don't want to use it. You don't want to use it,
Speaker 1: but it should be there, and so maybe it is
Speaker 1: one of the main criteria for looking for a bank account.
Speaker 1: And if you look through the best buys at the moment,
Speaker 1: you can get zero p cent overdraft up to five
Speaker 1: hundred pounds a month want six, one thousand pounds seven
Speaker 1: to nine, up to fifteen hundred pounds from ten to
Speaker 1: twelve and then on and then up to two thousand
Speaker 1: pounds in year four to six and not quite as
Speaker 1: big as I thought. But nonetheless you have kind of
Speaker 1: keep qualifying for it, I guess, by sticking with the
Speaker 1: account and having your main nance loan paid into it.
Speaker 1: And then there is there is the cash. So as
Speaker 1: you say, quite a few of them offering one hundred
Speaker 1: pounds in cash and then sent HANDRA is offering the
Speaker 1: rail card.
Speaker 2: Yes, which seems like a pretty good one to get.
Speaker 3: Definitely, if you're living away from home, it's going to
Speaker 3: be the most useful perk of a student account because
Speaker 3: it makes trouble cheaper and we wont know how much
Speaker 3: rail fairs are.
Speaker 2: Yeah.
Speaker 1: When I was looking at this, I was thinking, well,
Speaker 1: would I prefer to have a rail card over through
Speaker 1: a four year period or one hundred quid upfront, which
Speaker 1: seems to be basically what you're choosing between with these accounts.
Speaker 1: And I still think that I would go for the
Speaker 1: rail card because one hundred quid you can drop them
Speaker 1: in the pub in five minutes and forget you ever
Speaker 1: had it. But a rail card every year for four
Speaker 1: years seems like something worth having something longer term.
Speaker 3: Yeah, I guess it's spent. How much you want to
Speaker 3: go home and see your parents as well?
Speaker 1: Fair?
Speaker 3: Okay, I guess there's washing today.
Speaker 1: There's always watching to do and parents will do it
Speaker 1: for free, or I will, I will, I'll do it
Speaker 1: for free. And then there is the there are the vouchers,
Speaker 1: and so quite a lot of the accounts at the
Speaker 1: moment are offering vouchers, delivery vouchers or just eat vouchers,
Speaker 1: and I was looking at that and thinking, I'm interested
Speaker 1: in your opinion on this, and just thinking, well, if
Speaker 1: you look at those, mostly you don't get them in
Speaker 1: a wanner, so you don't get a one hundred quid
Speaker 1: of voures at the beginning.
Speaker 2: You can just go and you know, spludge on something.
Speaker 1: You get them at ten pounds a month or fifteen
Speaker 1: pounds a month or something like that, which of course
Speaker 1: means that you're going to spend that ten but you're
Speaker 1: almost definitely going to spend more every month, right, Yeah,
Speaker 1: So that feels to me like a negative rather than
Speaker 1: a positive, because it's just going to encourage you to
Speaker 1: spend more. It's going to encourage you if you don't
Speaker 1: have one already, to set up a delivery or a
Speaker 1: just eat account, and then you know what's going to happen.
Speaker 1: You're just going to keep using that, and those vouchers
Speaker 1: will have created a new spending habit for you that
Speaker 1: maybe you should never have had in the first place.
Speaker 2: I don't know, just to view what do you think?
Speaker 3: Yeah, no, exactly, and then you're getting into the holishe
Speaker 3: of budgeting and potentially running out of money. Healthy eating
Speaker 3: as well. You don't want to just live live on
Speaker 3: takeaways at university. It's important to develop good financial and
Speaker 3: culinary habits.
Speaker 1: I guess yeah, okay, well let's move then from student
Speaker 1: bank accounts. I think we've established what you should be
Speaker 1: looking for in those onto how do you budget?
Speaker 2: What are you budgeting for once you arrive at in
Speaker 2: university and how are you doing that?
Speaker 3: I guess it's spins where you're going to live. If
Speaker 3: you're going to live in a student in a student halls,
Speaker 3: everything like furniture is going to be provided. But then
Speaker 3: if you're in a shared house, you're going to Yeah,
Speaker 3: you need to furnish it needs think about bedding, and
Speaker 3: then there's going to be groceries, electronics, food books. A
Speaker 3: lot of experts say, don't rush. There could be this
Speaker 3: big rush to buy loads of pots and pans for
Speaker 3: when you're moving in. But if you're going to go
Speaker 3: into a shared halls or a shared house and everyone
Speaker 3: brings pots and pans, you could end up with ten
Speaker 3: or twenty pots and pans and you're not going to
Speaker 3: cook that much past us, So it may be worth
Speaker 3: waiting until your child gets university and then deciding what
Speaker 3: goods are needed.
Speaker 1: Yeah, and then it's also worth once you get your
Speaker 1: student card and maybe waiting till you get your student card,
Speaker 1: just presenting a very possible opportunity, right, because there are
Speaker 1: discounts all over the place for students.
Speaker 2: Sometimes I look at them and I.
Speaker 1: Think, why why don't they get literally everything with a discount,
Speaker 1: all for free?
Speaker 2: But they do.
Speaker 1: So you know you should take that card and you
Speaker 1: should use it as much as possible and go everywhere
Speaker 1: looking for a discount, right of course.
Speaker 3: Yeah, so yeah, you get discounts. Yeah, once you get
Speaker 3: a student card from a national union students, and you
Speaker 3: can look on websites such as UNI days and student
Speaker 3: Beans Save a student men may at least list places
Speaker 3: where you can get discounter goods and days out, so
Speaker 3: it's worth shopping around.
Speaker 1: So we've talked about how you should budget, what you
Speaker 1: think about spending on, how did you get an account,
Speaker 1: and how to figure out how much money to take, etc.
Speaker 1: But there's one thing that we haven't looked at, which
Speaker 1: is how important it is to just keep a little
Speaker 1: money aside. I mean, I remember from my own student
Speaker 1: days how exciting it is with that money arrives, it's
Speaker 1: very hard to make sure that you've got enough put
Speaker 1: aside should you have.
Speaker 2: An emergency your bicycle stolen, for example.
Speaker 1: So I'm sure I have as a student every five
Speaker 1: minutes putting aside in an emergency fund.
Speaker 2: That seems like an important start.
Speaker 3: Right, Yes, I guess the rule in when it comes
Speaker 3: to managing your finances when you're earning a salary is
Speaker 3: to have three to six months put aside. For students,
Speaker 3: obviously you're not going to be adding any money or
Speaker 3: unless you do get a job, so you need to
Speaker 3: work out what your bills are, and we have the
Speaker 3: cost of the goods you have and has had money
Speaker 3: set aside as you say, for those emergencies and unexpected
Speaker 3: expenses that you mentioned. But then there are apps that
Speaker 3: help set money aside and budget So I think Starlink
Speaker 3: Bank has a budget plant app which helps you set
Speaker 3: money aside. You can set up your Excel spreadsheet or
Speaker 3: maybe it's maybe even a good use of chat GPT.
Speaker 3: Finally something good that AI can can help with.
Speaker 1: Yeah, and the only other thing I would say, I
Speaker 1: don't know what you think about this, but in the main.
Speaker 1: There's a lot of inertia in bank accounts, right, So
Speaker 1: we talk a lot about how important did it is
Speaker 1: to look at the perks, look at the overdrafts, to
Speaker 1: look at the cash you might get back. But there's
Speaker 1: also maybe a sense that you should think about the
Speaker 1: fact that you might.
Speaker 2: Have this bank account for thirty years.
Speaker 1: I actually had my Lloyd's student account that then turned
Speaker 1: into atually into a graduate account. I have that same
Speaker 1: account for twenty five years or something. For the irritated
Speaker 1: me so much I moved, So it's worth thinking about
Speaker 1: whether that's the kind of institution you have your account
Speaker 1: with over the very long term as well.
Speaker 3: Yeah, I think the customer nurse is a big issue,
Speaker 3: and there may be decent pokes to join now, but
Speaker 3: in three years time, Log's bank may not necessarily be
Speaker 3: the best bank for your Santander. So you'd remember to
Speaker 3: keep shopping around, look out for cash back deals and
Speaker 3: extra perks for once you graduate, because I guess, yeah,
Speaker 3: once you're older, it may not be just eapbautch Is.
Speaker 3: It may be savings interest that interests you.
Speaker 1: Yeah, and can you swap account while you're at university?
Speaker 1: I mean, let's say you get to the beginning of
Speaker 1: your second year and you look around, you're like.
Speaker 2: Oh, look at that the two hundred quid on offer
Speaker 2: over there. Can you get those deals?
Speaker 3: No? You can't.
Speaker 2: No, you've got That's the whole point. They don't.
Speaker 1: No one wants us chopping and changing all over the
Speaker 1: blaze and taking on a hundred quid trice. You're going
Speaker 1: to only normally get a student account with those perks
Speaker 1: and benefit in your first year, right.
Speaker 2: Mark, Is there anything we haven't covered that you think
Speaker 2: is important?
Speaker 3: Guess the only thing we have is when you're kind
Speaker 3: of shopping around for deals, it's not just a discounts,
Speaker 3: it's looking at apps and kind of chrome extensions such
Speaker 3: as Camel Camel Camel and id love, which help you
Speaker 3: track prices so you make sure you're getting the best deal.
Speaker 3: Don't always buy new things like vinted, gum Tree, eBay, Facebook,
Speaker 3: Marketplace the great places to buy secondhand goods. There maybe
Speaker 3: old students who who've graduated and want to get rid
Speaker 3: of their old books and you can get their old.
Speaker 2: Notes, get their old notes.
Speaker 3: You know, were not necessarily cheating, but seeing how other
Speaker 3: people have revised, I would recommend cheating to cheap. Okay,
Speaker 3: that's a bad thing to end.
Speaker 2: No, don't do that. That'll be terrible.
Speaker 1: Out of this podcast. So do open a bank account.
Speaker 1: Do think carefully about how much of a loan you get.
Speaker 1: Do talk to your parents if you can make them
Speaker 1: pay anything up front for you. The less date you have,
Speaker 1: the better. Do budget carefully. Do not consider your overdraft
Speaker 1: to be your emergency account. Do not spend all your
Speaker 1: loan the second you get it. Freshest week is only
Speaker 1: the first week. I think that's the main pieces of
Speaker 1: advice that I have, any one main piece of advice
Speaker 1: from you, Mark.
Speaker 3: Before we finish, I guess just enjoy it, but not
Speaker 3: too much. It'll be your first taste of independence, but
Speaker 3: not too much yet.
Speaker 2: Brilliant Mark, Thank you so much joining us today.
Speaker 3: Thank you very much.
Speaker 2: Thank you for listening to this week's Merin Talks to
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Speaker 1: This episode was produced by some Asidi production support by
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