Cashing in

With the ominous credit crunch upon is, Natalie Woolman, investigates the ways to make your money work for you.

By now, you've all heard at least one horror story about student finances. The one about the guy who spent his entire loan on an expensive electric guitar and a jumbo bag of porridge oats and wound up malnourished in hospital is my favourite. It garners the most gasps if it is told with the right pauses over a Freshers' pint. But before you panic and ask your mum to send a hamper of tinned goods in an effort recalling the Blitz, here are a handful of home truths about your undergraduate pennies.

Everything you read about student finances will include one short, frustrating word: budget. This is the ticket. Being careful, or perhaps even more importantly, being aware is key: Yes, there will be a few weeks that are tighter than others and no, you shouldn't pass up the debut pint at your local this week because you splashed out at WH Smith but keep a mental tally of the late night kebabs before you get a shock statement. Tot up your incoming and outgoing big payments (rent, fees, bills, transport) at a spare moment soon before term gets into full swing and you find yourself succumbing to the temptation of the three zeros at the end of your bank balance. Type 'student budget calculator' into Google and you will find a whole raft of websites helping you to think through what your expenses will be and then offsetting those costs against your income. It has the potential to be a very useful tool for the fearful and bravado alike, and will allow you to break the thousands down into a weekly sum that you should be able to get your head around.

If you are reading this you will by now probably got your hands on a student bank account, a debit card and a cheque book. These spending utensils are relatively straightforward if you have found the right account, making sure that any overdraft facility you open is interest-free and that you are aware of all the other perks of a student account (often free tickets, discount offers and the like).

Cheque books are useful for paying big bills (like your rent) and writing personal cheques which cannot be paid in cash and for which you want to have a documented record (the subscription to the university Ultimate Frisbee society, or the like) so ask your bank for one if you didn't get one when you opened your account. However, remember that you cannot dictate when cheques get cashed so be wary of writing lots of cheques at once, or writing them when your budget is waning: if they are cashed when you do not have enough money to pay them you will be fined and they can be cashed up to six months after they are written so keep a note of them.

If you have debit card you do not need a credit card. In fact, you do not need a credit card at all. If you have a debit card, a student account with an interest-free overdraft facility and a student loan, there is absolutely no reason for you to get a credit card as well. It will suck money because the interest will compound as time goes on and you will find yourself paying interest on your interest. The same applies to store cards so put that dress you can't afford down and walk away before you are tempted.

These are the big things you need to be on top of, but the smallest budget cuts will make a difference too, so have a gander at our top ten for day-to-day ideas. Other than that, let it be stated once and for all that you can not eat porridge three times a day, seven days a week without suffering the consequences and that the guitar was totally not worth it.

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