Minimise your debt

Graduating with debts is a fact of student life, but it can be kept under control. To avoid slipping too far into the red, a two-pronged attack works well: keep the outgoings down, and maximise your income.

The average student leaves university with debts of over £12,000, according to Credit Action UK Debt Statistics (December 2007). This can seem a very daunting prospect when you finish your studies and step out into the working world, but there are a number of ways to make sure you've got enough money to have a life.

Minimise your outgoings

A simple budget stops too much cash slipping through your fingers. Make a note of what you spend over the next few days to look for areas you could cut down on. Everybody has a weak spot, whether it's long mobile phone calls, clothes, CDs, or something you know to be a luxury. 

How much do you need to spend every month? Figure in rent/hall fees, bills, groceries, transport, and direct debits. Then add in enough for a few good nights out; nobody can live like a hermit for long, and feeling deprived and miserable is enough to send most of us off on a spending spree. Then add an extra 10% on top of that total figure to allow for unexpected expenses.

Maximise your income

At the same time, make sure you're getting all you're entitled to. Parental contributions cannot be reinforced, but some lucky students can sweet talk Mum, Dad and Granny into parting with a little extra. Overdrafts are usually free when pre-arranged, but crippling otherwise, so keep the bank manager happy and think ahead.

Look out for college access funds, travel grants (contact your LEA), other supplementary grants, low-interest hardship loans from Student Loans Co, sponsorships, and college or charity bursaries (try the college careers library or finance office). Apply for everything; if you don't ask, you don't get.

Setting up a direct debit

Setting up a direct debit for any regular household and personal bills could save you a few extra pennies. It means that the money you owe is taken out of your bank account on a certain date to pay a bill. A lot of companies offer a discount if you pay through direct debit. BACS (the industry body behind direct debit in the UK) estimates that individuals can save up to £100 a year paying this way.

Serious debts

Some students find themselves getting deeper and deeper into trouble. If you think you are in over your head, first admit that you have a problem, and then get help quickly. For more information or try the following contacts:

Consumer Credit Counselling Service
Tel: 0800 138 1111 (Mon-Fri 9am-5pm)

National Debtline
Tel: 0808 808 4000

For an instant fix to help you work out how much you need to spend on bills and fun, try out our budget planner.