If someone you know is about to start university, make sure they follow this essential advice before heading off!
If you're about to go to university, no doubt your head is buzzing with crucial questions. Will you make new friends as good as your existing ones? How difficult will you find your course? Exactly how much will a pint cost in the students' union?
Just make sure that, while you ponder these important issues, you spare a thought for how you'll manage your money. As I know from bitter experience, making daft financial mistakes while you're young can affect your life for years to come.
In this note, I'll take a quick and simple look at the seven things I think all students should take note of do before they head off for their higher education.
1. Know what help you're entitled to
First and foremost, make sure you know what financial help you're entitled to from the government.
Most students can get a loan from the Student Loans Company (SLC) to cover their tuition fees upfront. In addition, maintenance grants and loans (to cover living expenses such as rent, bills and food) are available, based on how much your family earns.
You can find out more about student loans and grants by visiting the Government website. It also features a handy calculator that will help you work out how much you may be able to borrow or claim from the state while studying.
Many people worry about the size of their official student loans, but it's important to remember these will not need to be paid back until you are earning at least £15,000 a year.
Nor do student loans bear interest in the same way as commercial debts; their cost is pegged to the retail prices index (RPI) measure of inflation, which - in theory at least - means you will only ever have to pay back 'the same sum' you borrowed.
I think it's sensible to take out the full loans you are entitled to. Remember, there is no rule that says you have to spend every penny you get.
If you don't need the full amount, you can leave some cash in a savings account accruing interest until after you graduate. At that stage, you could use the nest egg you've built up to pay off a chunk of your debt.
You may also be entitled to non-repayable grants while studying.
You can get a non-repayable grant to help you cover living expenses. If you started in 2012 or later, this is up to £3,387.
The amount you get depends on your annual income. If you get the grant, it will reduce the size of your maintenance loan.
Students doing their first full-time undergraduate higher education course (excluding students on NHS-funded courses). Whether you receive it and how much you can get depends on your household income. You must have lived in the UK for three years before studying.
For details and how to apply, check out the Student Finance website.
2. Bag the right student bank account
Most students, of course, will need their official loans - and then some! This is why many use the 0% overdraft facilities on offer from banks.
While some institutions offer a cash bonus or freebie when you sign up for a student account, think carefully before opting for a particular bank. Although some bonus gifts, such as the five year 16-25 railcard available from NatWest, may prove useful, most people will find they're better off opting for the account that comes with the largest interest free overdraft.
Right now, Halifax and Royal Bank of Scotland are offering accounts that come with 0% overdrafts of up to £3,000. Meanwhile, Barclays is offering student customers an interest free overdraft facility of up to £2,000.
Whichever student account you go for, it's crucial to remember that whatever you borrow from your bank will ultimately have to be repaid.
Once your course is over, you'll have a limited amount of time to clear your overdraft before you start being charged interest on it - so don't run up a large debt unless you genuinely need to!
3. Get to grips with budgeting
Budgeting is the key to good money management. If you don't budget while you're a student, it's far more likely you'll get into financial trouble and suffer all the stress that this entails.
Budgeting is about balancing the cash you have coming in each term with the amount you will need to spend.
4. Approach credit with caution
Credit cards are now an 'extra' offered alongside many student bank accounts. However, I would advise most people to approach these with caution.
While credit cards can be extremely useful, using one is an incredibly expensive way to borrow if you don't clear your balance in full each month.
What's more, if you are only able to afford to make the minimum monthly repayments (MMRs) set by your credit card provider, be aware that even a small debt could cost you a significant sum during your degree.
If you maxed out a card with £500 limit and an APR of 18.9% during your first week, paying back a typical MMR (2% or £5 of the card's balance) each month would reduce your debt by a measly £92 over three years. What's more, you'd be charged £250 in interest during the same period!
Store cards are even more costly than credit cards; many come with astonishingly high APRs of up to 30%.
Therefore, resist the discounts and deals that may tempt you to spend on one unless you know you can repay the balance in full before you are charged interest.
5. Ensure you’re insured
Many students (including their parents!) forget to think about the need for insurance while away at university.
However, many students take possessions worth thousands of pounds with them to campuses across the country.
What's more, student accommodation is often targeted by thieves. It is potentially very easy for them to swipe five or six versions of an expensive item (for example, a laptop) from the same house or hall of residence.
Some home contents policies will allow you to cover your possessions under your parents' insurance, so it is well worth investigating this option.
Alternatively, many insurers now offer specialist student policies at competitive prices.
6. Plan ahead forward!
It's important to think long-term when you're managing your student cash stash. Remember, the choices you make now could seriously affect your financial future.
For example, spending your whole 0% overdraft in the first year of your degree could leave you in dire straits during the second - so always consider the impact your daily decisions could have in a few weeks' or months' time.
7. Have fun!
Finally, remember university is there for you to learn, it's alright to make some mistakes – hopefully they won’t be too costly. Once you've found out about your mistakes, don't let guilt hold you down; learn from them and most importantly have fun during this phase of your life.