It can be a scary and worrying experience leaving home and fending for yourself while at university for the first time. One of the biggest challenges students will endure is keeping on top of their finances.
According to a recent study by ING Direct, 87% of teenagers admit they do not know how to manage their money. By not having the sufficient knowledge of financial budgeting can lead to financial difficulties and put student’s mental health at risk.
Karen Gray a careers coordinator at The Chauncy School in Hertfordshire feels that it is vital for university students to gain the knowledge of budgeting and borrowing before they leave secondary school. She said: “I do feel that an expert should be sent into each school, maybe linked to a bank who could help students manage their money and explain the banking system to them.” She also added “I feel that there should be a government initiative that is unbiased that could circulate around schools and teach lessons about this subject.”
New research conducted by the University of Southampton and Solent NHS Trust, suggests that students who experience financial difficulties are more at risk of mental health conditions such as depression and alcohol dependency.
Dr Thomas Richardson, a visiting academic at the University of Southampton and Principal Clinical Psychologist at Solent NHS Trust, led the study. He said in the Community Mental Health Journal: “The findings suggest a vicious cycle whereby anxiety and problem drinking exacerbate financial difficulties, which then go on to increase anxiety and alcohol intake. Interventions which tackle both difficulties at the same time are therefore most likely to be effective.”
Students can lower the risk of stress and anxiety due to financial issues by starting the term with a plan and a realistic budget. Wendy Edmondson, a student support officer who is part of the student funding and financial support team at the University of Hertfordshire stated: “The first step to get in control of your spending is realising the difference between what you need and what you want.” She also added: “By working out your total income and working out your monthly outgoings, you can divide that by the weeks in the year and you will find the total amount of money you have for each week.”
Universities in and around the UK make helping students with financial issues one of their top priorities. Just one example is the University of Hertfordshire, in which it regularly holds budgeting workshops for all students.
In one particular workshop, Rianna Harrison-Barker, a project officer within the student funding and financial support area stated: “These workshops are put in place in the hope that making students aware of funding options, financial support available, and by training them in budgeting, offering debt counselling and financial drop-in sessions; we, as a team, can make our students financially savvy, more adept at coping with financial difficulties and essentially making them ready to face the big world following university.”
The most important advice Rianna Harrison-Barker gave in the workshop was too “cut out unnecessary spending”. For example, if a student purchases a regular coffee priced from £2.00 – £3.00 everyday compared to making their own within their halls or housing, they could save a total of an estimate £75 a month.
The budgeting workshop particularly focused on food shopping and ways for students to lower the costs of it. Both Wendy Edmondson and Rianna Harrison-Barker emphasised on not buying premium branded food. By buying supermarkets own brands it is possible for students to cut the price of their food shopping bill, by nearly half. Wendy Edmondson said: “Most of the time, the supermarkets own brands are made in the same factory as the premium brands. By making these small changes with your food shopping, it can allow you to have extra money for things that you want to spend your money on.”
Sophie’s Story: ‘My addiction to spending’
University of Bournemouth student Sophie Riddle, age 21, has suffered with an addiction of over spending throughout her life at university. Within the first two months of her first year at university she was in her overdraft by £2000. This led her to nearly failing her first year of study.
At 18 years old, Sophie made the biggest decision of her life, to move away to university in Bournemouth to study Sociology. She said: “I always knew I wanted to move away from home when applying for university, I’ve never been the stay at home kind of girl.” Sophie in fact moved away from her hometown in Ware with a friend, who was attending the same university as her. However, two months into her first year of study, things quickly spiralled out of control in regards to her mental health and her financial issues.
“I didn’t think anything was wrong at first. I thought everyone was doing the same thing as me. I spent way over six hundred pounds within fresher’s week which I thought was normal. I bought loads of new clothes in the first week as I didn’t live far from the shopping centre. I also spent a lot of money on food.”
Sophie was privileged enough to have help with her financial fees from her parents. They would often transfer her money if she was struggling to live on her normal income. She stated: “I think that’s how my addiction started. I had no worry at that time about over spending because I knew my mum or dad would transfer me the money if I needed it.”
Sophie admitted to lying to her parents on what she was spending her money on. She said “I told my mum and dad that most of my money went on essentials such as: university books, food, bills etc.” She also added: “At the time I didn’t care that I was lying to my parents, all I knew is that I couldn’t miss a night out with my new friends!”
However, after all the over spending and the lies, by December Sophie had reached into her overdraft by £2000. She had reached rock bottom, being late for lectures – or even worse, missing them. She said: “At one point, I was going out every night, even if I had a 9am lecture the next morning. I would always be late.”
Sophie’s mental health deteriorated due to stress and anxiety about her over spending. She said “I remember when the date to pay my bills was arriving, I was so stressed and I couldn’t even afford to do my weekly food shopping. I felt scared, anxious and I felt like I had no one to go to.” Sophie picked up the courage to tell her parents what had happened and how she couldn’t stop spending. She went to see a doctor who advised her to go to counselling sessions.
“At first I was so embarrassed, I mean I was a university student going to counselling for spending too much money, isn’t that what students are supposed to do? After a few sessions, I realised I had nothing to be embarrassed about, I had a problem, which I wanted to fix. My parents thankfully recovered me out of my overdraft on the terms that they manage my money and I use my new knowledge from my counselling sessions to try not to over spend.”
When Sophie went back to university, her friends helped her follow a strict budget, prioritising the most important payments such as bills and rent. She said “Writing down everything I needed to pay each month made me realise how much id over spent before. It instantly made me feel less worried, because I knew that this budget still allowed me to go out, but not to the extent that I was before.”
Sophie is now in her third year at university and graduating with a predicted grade of an Upper Second-Class Honours degree. She said “I cannot believe it, I never thought that this would ever happen. I cannot thank my friends, parents and most of all the University for helping me with my problems.” She also added “I will always be a shopaholic, but I now have the skills and knowledge to allow for that. My biggest advice to students starting university would be to stick to a budget. It might not sound fun, but it has helped me throughout my life at university, I just wish I knew all this before starting my first year.”