Managing my money for young adults
Managing my money for young adults

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Managing my money for young adults

10 Budget pressures away from home

Moving away from your family home for the first time, whether to work or to study, is the point when, if you’re not careful, you might lose control over your finances.

In the next video Ellie, Katy, Olga and Jamie talk to Bobby about their experiences in dealing with money at university. As you watch, make the most of being a fly on the wall and see if you can work out the three top pressures described here.

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Transcript

BOBBY SEAGULL
Going to university usually means leaving home, and that means you have to take greater control of a wider range of financial matters, as many of the things that would have been done for you at home, like grocery shopping, are now your responsibility. Living away from home with others also opens you up to greater social pressures when it comes to your lifestyle and spending. No wonder, then, that many people get into financial difficulties.
I'm here with a group of people that experienced the challenges of living away from home. So let's see what we can learn from them. So the first thing I want to ask, was it difficult for you to manage your finances at uni?
KATY
Yeah, I would say at the beginning in first year, it's quite difficult because that's when you're not used to budgeting for like rent and food shopping and bills and things. Obviously as you progress through university, you kind of learn from your mistakes and also learn what to budget for coming up in the next terms and things like that. So it gets easier, I would say.
JAMIE
Yeah. I think one of the things I most struggled with in first year was my student finance was cut very suddenly towards the beginning of the year. And I luckily had a job, so I just worked through that. But it really helps you to manage on making 20 pound last a week and getting all the essentials out of 20 pound a week, so ...
BOBBY SEAGULL
Yeah. So some of you have mentioned the mistakes that you've made. So what other mistakes have you made at university?
ELLIE
I bought an archery bow for archery tag because I love archery, but I used it once. It was a bit of a waste of money. I mean, it was fun when I did use it, but then I kind of just kept it in its box for ages and then, yeah. I'm probably going to sell it soon, but it's kind of just sitting there. So yeah, don't do that.
JAMIE
Yeah, one of the mistakes I made was ... because I have my own place now and first time I've ever had my own room, so that was great. I thought I'm going to customise the place little bit. I'm going to get myself an X-box, get myself a nice TV, all of which ended up costing a lot.
And that sort of debt you don't really want to be in. You're already paying nine grand a year, so you don't really want to be adding to that with the nice fancy TV or the latest games console or anything like that. So just you know, a bit spent.
KATY
I think it's quite easy to get carried away at first, because when, especially like first term, first year, you're not used to having this big influx of money. And you look at your bank and think, wow, OK.
ELLIE
I'm rich.
KATY
And you don't think actually how long has that got to last, so yeah. It got easier, but ...
OLGA
I think my main mistake was related to understanding. Because moving out of parental home meant for me I'm going to be free. I can ... I've got my money. I can spend it as I want. But then suddenly I realised I've got responsibility, financial responsibility, and there was quite a big shift for me. So it changed this understanding.
BOBBY SEAGULL
So talking about responsibility, did you run a budget to control your spending?
ELLIE
I ran a budget this year. I basically, I ignored all the extra additional income that I was getting from elsewhere. But I took the amount of money that I was getting from student finance at the beginning of the year and took away rent from that, and then divided it by 52, so the year. And then took off about 10 pounds from that so I was kind of left with 30. So I kind of strictly set myself a 30 pound budget per week, which some weeks was easy as pie, and then other weeks I found myself sort of going into my overdraft. But I found that that way I avoided my real overdraft, so I found that really useful this year. It kind of made up for last year.
BOBBY SEAGULL
Buying the archery kit.
JAMIE
Short answer for me. No, I didn't budget at all. I think this year I've learned a lot more how to do that where I haven't been working. Last year I had to, obviously otherwise I wouldn't be able to eat. But you really learn how to make 20 pound, 10 pound last as long as possible when you're on that sort of thing.
BOBBY SEAGULL
Good. So universities can be very social environments. Did you find that there were social pressures to spend money actually?
KATY
Yeah, I think it is hard, like I said, especially at the beginning when you're trying to form friendships. Because you don't want to be the boring person that's not going out all the time because of money, so you kind of ignore the money side of it and go out. Potentially, so you kind of couldn't help. Not that you need to form friendships by going out, but I think at the beginning it is a social aspect too. When you move away, you want to have like a solid base of friends. And you don't want to get that reputation as a person that, don't ask her. She won't come out because she hasn't gotten any money.
So I think it's just getting the balance. And it does, obviously, once you kind of establish a group of friends at university, I think it then becomes a bit more acceptable to say, actually, no. I don't want to go out, and not feel obliged to do it.
BOBBY SEAGULL
So it sounds like getting the balance right is really crucial. So what would be your top financial tip for people starting at university?
KATY
I think factor in the important things that you're going to need money for that's essential, so like food and your rent and, like university, you know, textbooks and stuff. Because there's a few people I knew, they would have all this money at the beginning and have, you know, be able to buy food. But then towards the end of term, it was like no food. Absolutely no food at all and no money to get it.
And if you haven't gotten then any help from, say, parents or you don't want to say to your parents, I've run out of money. I can't afford food, you're then kind of eating dry pasta, well, over, plain pasta.
ELLIE
Or you're kind of asking other people for help, which is never a nice feeling really.
KATY
I had a flat mate that would just have boiled pasta with a slab of butter on, and that would be the sauce. But for like two weeks straight and then go home for Christmas. The next bit of the loan would come in, and it would be the same cycle every time. But ...
OLGA
That's a nice pattern.
ELLIE
Yeah. It's so easy to slip into that cycle of, look, oh my gosh. I've got so much money in my bank account. Let's go party. Or, let's just buy all the things. And then a few weeks later you're going, why did I do that?
JAMIE
One of the things that I learned this year, especially with one of my housemates, is cook ahead of time. So cook one big meal that's going to last you a few days, or put it in the freezer. You can just pull it out like 5, 10 minutes, there it's ready.
Good, healthy stuff you can do and it all comes really cheap like. Shop local as well. In Leicester, we've got quite a large market where we can buy all sorts of fruit and veg and all sorts of things there, and just basically you help your local market and stuff like that. But cook ahead of time is always good.
OLGA
My advice would be whatever you're doing and how you spend your money, just always make a plan. Don't go like, let's buy it. It doesn't matter. Try to plan ahead and then things will work out.
BOBBY SEAGULL
So looking back at university experience and looking right now and ahead, how do you feel about the debts that you built up as student loans, and how do you feel about the debts you're currently building up?
KATY
I try and just pretend it's not there. It's kind of deceiving. You see a payslip and it's something that goes out, and you, because you can't see it when you log onto online banking. It's kind of like a minus thing. You get your yearly slip at the end, telling you how much you've paid off and everything.
But I think it's a bit scary when you see the big figure all in one go, but when you realise you only pay it back once you earn a certain amount of money. And it does come out of your payslip, so it's not like you have to budget for it once you've been paid. It's not a stressful loan to have. I don't think it should stop people necessarily going to university and getting it, like having higher education.
JAMIE
I mean, one of the things that I know a lot of people have been off put from my friend's perspective at least, is I don't want to pay that money back. But it's giving you that opportunity to move forward with something that you can actually be earning a lot of money on, do something you love you want to do. And yes, while the debt is there, again, like it's been said already, you're only paying a little bit back per paycheck. It's going to be taken out of your money anyway, so why not take the opportunity, why not just go forward with it and possibly have the best few years of your life.
SKATY
And then especially when you want to go and like, I've been able to go ahead and buy a house, and I can go on holidays and stuff. It doesn't necessarily impact ... I know it comes out of my ... and it's a kind of, every time you open your pay slip, you're like, oh. Wish I had that money. But equally, I wouldn't have the job I had and be in the situation I am now if I hadn't gone to university and done that, so ...
BOBBY SEAGULL
OK. Thank you for sharing your words of wisdom there.
JAMIE
You're welcome.
ELLIE
You're welcome.
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