Newspaper article The Evening Standard (London, England)

How to Stretch Your Cash - EDUCATION 2002; Debt Is Part of Student Life These Days, but Careful Money Management Can Help Ease the Pain

Newspaper article The Evening Standard (London, England)

How to Stretch Your Cash - EDUCATION 2002; Debt Is Part of Student Life These Days, but Careful Money Management Can Help Ease the Pain

Article excerpt

Byline: ANN WILLIAMS

Debt is part of student life these days, but careful money management can help ease the pain

Credit cards

Credit cards and store cards can seem an ideal way to get your hands on extra cash when funds are low, but they come at a high price. With some companies charging more than 17 per cent interest APR, credit cards are often the most expensive form of borrowing and should be avoided if possible.

However, they are a good way of managing unexpected expenses, as long as you choose a card with a low APR - preferably less than 10 per cent - and pay off the debts each month. The best cards do not charge an annual fee and have low interest rates, such as Cahoot Visa, which charges eight per cent APR.

Savings/banking/ deficit banking

"Spare cash" is hard to come by if you're a student. But if you do have any money left over from loans or part-time work, look for the best rate of return and save it in a taxefficient way.

Student loans carry very low interest charges, set at the rate of inflation (currently 2.3 per cent) and, if invested wisely, can even make money. Cash put aside in a mini cash ISA can earn more than four per cent tax free.

Some of the best cash ISAs are at HSBC, which offers 4.35 per cent, and internet bank www.smile.co.uk, with 4.25 per cent.

You are taxed on savings accounts, but they pay good rates of interest.

Northern Rock offers up to 4.5 per cent and Nationwide up to 4.25 per cent a year.

Tax

To stop the taxman getting your holiday job cash, students earning less than the tax threshold (up to pound sterling4,535 a year) can ask their employer for a P38(S) form and receive wages tax-free. Don't despair if you've already paid tax, you can claim it back at the end of the tax year by filling out a P50 form.

Likewise, students not liable to pay income tax can also hand in an R85 form to their bank or building society for tax-free interest.

Insurance

Home, car and personal insurance can cost a fortune, especially if paid in monthly instalments, because many companies charge expensive premiums or high interest rates for the privilege. As students often get lump sums from loans at the beginning of the year, it is best to pay the yearly amount in one hit.

There are studentfriendly insurance firms out there, see our feature on student accommodation (page 13) for details.

Bills

Yes, even students get bills. Try to make them more bearable by shopping around for the best utility suppliers. If you are not restricted to named suppliers in your tenancy agreement or halls of residence, check out www.uswitch.com on the web to see if you can move to a cheaper gas, electricity, cable TV or phone supplier.

Phones

A mobile is the ultimate accessory, but also a major cause of student debt. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.