Finance and freshers don’t always make an A-grade combination.
As many students leave Ireland to continue their studies in the UK, for some it will be their first real taste of financial independence, with important decisions about money matters to be made.
And with a whirlwind of social engagements, the pressure to blow the budget when you’re settling into student life can be strong.
More than half (56%) of students who have already had their first taste of university life say living from home was more expensive than they had expected.
Around one in three (35%) felt overwhelmed at the thought of managing their own finances, the research from HSBC found.
The research also delved into students’ outgoings during their first weeks at university.
It found that, on average, students can expect to spend £3,304 during the first 100 days of starting their studies.
The bulk of this spending is swallowed up by rent and food.
And the research also suggested students spend nearly twice as much on alcohol and nights out during their first 100 days of study as they spend on course materials.
The £3,304 average figure includes £1,279 spent on rent, £670 on food, £184 on travel, £155 on clothing, £328 on course materials and £626 on alcohol and nights out.
As a result of their spending habits, one quarter (24%) of students borrow money, use a credit card or dip into their overdraft before the first term is over, the research among more than 1,000 university students found.
To fund their first 100 university days, three-quarters (75%) used a student loan and 42% had help from family members such as the “bank of mum and dad”.
One in six (16%) had a job to finance their first 100 days of studying and the same proportion used an overdraft.
It seems a lack of planning is behind many money mistakes made at university.
Looking back, 35% of students surveyed would have budgeted more carefully and 33% would have saved more money beforehand.
One big financial decision students will need to make is which student account provider to use.
Rachel Springall, a finance expert at website Moneyfacts.co.uk, says just because a particular bank is nearby or on campus, or offers particular perks, this doesn’t mean it’s the best deal for your needs.
She says: “Students must be wary not to impulsively choose a bank account simply for the up-front perks, because they need to be sure the account can support them through their years of education.
“Some perks are just gimmicks and don’t really give much value to the longevity of the account.
“Researching all the available accounts and weighing up the various overdraft facilities should be the first step to finding a suitable deal.”
Springall warns that while it’s tempting to dip into your overdraft, “there is a huge danger of racking up a large amount of debt and not being able to pay it back when the time comes”.
She also suggests students should make the most of mobiles and tablets to check their payments on the go, helping them to stick to a budget.
Sharing with your housemates – whether it’s setting up a rota for meals or handing down course books – can also help keep costs on budget.
Springall also suggests making the most of discounts and deals aimed at students.
She says: “Getting the most out of supermarket offers and building up points to exchange for vouchers will help keep costs down.
“Students could also take advantage of cashback websites and any reward schemes on their current account.”
Meanwhile, there’s also the cost of insuring your belongings to consider.
It may be worth checking whether an existing home insurance policy could be extended to cover possessions at university.
The Association of British Insurers (ABI) also suggests marking valuables with a UV pen, writing down your postcode and telephone number. This will help police identify any recovered property.
It could also be worth photographing your possessions and keeping receipts, in case you need to make a claim.
Mark Shepherd, the ABI’s manager, general insurance, says: “Most of us have gadgets we don’t want to be without, so it pays to plan security measures and get insurance in place before you move in to your student accommodation.”
How can students avoid a financial fall-out?
Research suggests 18 to 25-year-olds are nearly twice as likely to fall out with friends over money compared with people generally.
Mobile payments service Paym found 22% of people in this age group had a spat with friends for this reason, compared with 12% of all age groups.
Here are some tips from Paym to avoid financial fall-outs:
Agree how you will split household bills. Decide if you’re splitting these evenly each time by paying for yourselves. If you’re taking it in turns make sure you’re keeping track of whose turn it is.
Before heading on a night out, make sure you’re all on the same page in terms of how you’ll be splitting the cost, will it be rounds or just drinks for yourself?
Contrary to what many people feel when they’ve loaned money, Paym’s research found reminding the other person doesn’t usually have a negative impact on the relationship. Many people surveyed actually wanted to be reminded so they didn’t forget.
Technology such as mobile payments can help friends pay each other back quickly and easily.