With students beginning to dip into their overdraft, Kayley Gilbert believes that we should only consider this option as a last resort.
If the statistic that the third week of November is the mostly likely time of the year for students to start dipping into their overdraft is to be believed, many students have just crossed over into the red. With countless students having maintenance loans that only just cover their year’s worth of rent, and other students that have loans which don’t even cover that, finance is clearly a struggle for many.
Even though in theory, maintenance loans are worked out with parents’ income taken into account, many students are stuck in the middle, with a loan that only just covers their rent and parents that don’t earn quite enough to be able to fully support a student through University.In this way, many students are forced to live on or below the line between the black and the red, relying on their overdraft.
Although living in Exeter is much cheaper than somewhere like London, if your maintenance loan only covers your rent, students will have to live on money coming either from their parents (if they can afford it) or on their overdraft.
Personally, much like other every other student I’m sure, I would like to avoid going into the red altogether. However I know that some students have little option but to do so. So I wouldn’t say that it was irresponsible for students to rely on an overdraft during their studies if they don’t have any other choice, but it should definitely be a last resort.
I certainly don’t think that students should have to go without heating or food in order to avoid going into the red, especially this time of year. However, I believe that students should do everything they can to stay in the black for as long as possible. In order to do this, students need to take responsibility for their spending, taking full opportunity of student discounts, offers and shopping around for cheaper deals, even if it means changing their phone network or walking further to the shops.
Students with the need to use their overdraft, especially this early in the academic year, should think about getting a job to bring in extra money. There are ups and downs to having a job whilst at University. Working will leave less time for studying, revising for those all important exams and taking time off to socialise. However, a job will bring in that extra bit of cash that will help out so many students. This in itself will relieve stress and pressure on students that is created by living on a small and limited amount of money each month and trying to avoid crossing over into the red. In this way, it may have a beneficial rather than detrimental effect on student’s studies.
This time of the year first and second year students are thinking about houses for the beginning of their next year. Having had experience of living on their maintenance loan for either six or eighteen months, students should be aware of their outgoings and therefore how much they can afford to spend on rent for next year.
One way to save money thinking forward to next year would be to move into a flat cheaper than current accommodation taking into account the possibility of additional utility costs. Booking a flat with bills included in the rent, much like on campus accommodation for first years will mean avoiding additional costs if someone accidently uses too much water. So going for a cheaper flat with all bills included would leave more of your maintenance loan to spend on food and other expenses throughout the year, which would be invaluable to students struggling with finances.
So even though I don’t think it’s irresponsible for a student to dip into their overdraft if it’s necessary, students should only consider doing this as a last resort. An overdraft is there for emergencies, not for luxuries. Keeping a financial diary to keep on top of your back balance is a brilliant way to be aware of how much you’re spending, a fact which every student should be conscious of. In this way, students should do everything they can to stay in the black without having to live uncomfortably.
Kayley Gilbert
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