Being a university student is often the first time that many people will have access to considerable sums of money.
But many undergraduates have admitted to making plenty of mistakes regarding their finances in their first year, according to a study by a UK comparison site.
While 53% of students questioned said they felt they managed their finances well, 19% said they were seriously worried about their financial situation.
Unsurprisingly, maths, accountancy and finance students felt more at ease with their finances as 63% said they managed their finances well compared to English students, 43% of whom said this was the case.
Nearly a quarter of the students questioned said they had made some sort of financial error, with a wide range of mistakes reported.
The most common mistakes
Top of the bill was spending too much on nights out, reported in 29% of cases while overspending on take-outs and ready meals was listed by 28% of those with financial issues.
Other factors including spending too much on clothes – occurring in 25% of cases – and one in five people said they made too many impulse purchases.
Some 18% of respondents said they had lent money to friends that had not been repaid, while 17% bemoaned the lack of a credible budgeting system.
Choosing the wrong student bank account, not shopping around for the best deals, and overspending on accommodation were all listed by 14% of students.
Students also said they were too quick to pick bank accounts that offered freebies rather than on which one might actually be best for their needs – listed by 11% of them.
Losing track of spending on plastic cards, including both debit and credit cards, was listed as an issue while incurring penalties relating to going overdrawn also made the list.
Avoiding errors – some student tips
The majority of problems that students reported relate to poor budgeting and poor money management – perhaps not surprising given their relative inexperience of dealing with large sums of cash.
This is potentially why 49% of students identified making a budget and sticking to it as their top tip, while shopping around to find the best deals was also suggested.
Not ignoring letters from a bank was named by more than a third of students, while 33% said being honest with family members about finances can improve the situation.
While they may not be able to provide financial relief, family or friends can still provide useful and relevant advice.
Budgeting with prepaid options
Financial management is extremely important, so keeping spending in check with a prepaid card is a great way of ensuring that you don’t spend more than you would like.
A prepaid card limits spending to the amount on the card at any given moment and is not directly linked to a bank account, making funds safer.
The cards can easily be topped up or replaced if required, while accounts can be checked regularly online if needed.
A prepaid gift card could also be used in instances where a friend or family member might want to provide finances for essentials such as shopping.
The card could be topped up and then used at supermarkets or chain stores, while spending could be tracked to ensure it is being used in the right way.