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Student debt: How to cope and manage student finances

Kelly 4th Mar 2020 No Comments

Reading Time: 4 minutes

Student debt is a hot topic in today’s economic climate.

According to Intelligent Environments, three quarters of university students feel stressed about the debt they accumulate while studying – paying these debts back is a concern!

The stress can mount quickly as rental payments and interest, as well as the rising cost of basics, start to mount. Surveyed students revealed that this source of stress can be detrimental to their relationships and exam results, and interfere with their ability to afford things like food. It’s a tough world starting out, and debt is no joke.

If debt is on your mind and you’re looking for ways to cope better and get on top of it, follow these tips.

If your bank has an app, use it

Virtually every bank has an app, and many have handy tools to evaluate spending, so use them! Before you get caught in overdraft, make sure you know where you’re at in your spending cycle. If you can have visibility of your account, it’s a great way to make sure you’re conscious of your budget and where your money is going.


Audit your student debt

managing student debtIt doesn’t sound very sexy, but it’s important to take stock of where you’re at if you’re in debt or afraid of losing control over your finances. This means determining your monthly payments, including any debt repayments, and factoring in all sources of income and expenditure – putting together a rudimentary budget, in essence. For a detailed budgeting start, check out this guide to budgeting from the Money Advice Service. By doing this, you can easily see what needs to be prioritised.


Prioritise to reduce student debt 

The basic rules here are that if you have any personal loans that attract high interest, for instance, these are way more important to address first, before your government loans (which are more flexible).

However, it depends on what your long-term debt reduction goals are. Are you hoping to have one credit card or debt eliminated ASAP? Then target the lowest balance first. Are you hoping to eliminate interest repayments? Then focus on the highest interest rate debt first. This is often called snowballing your debts.

Or, are you trying to boost your credit score? Focus on credit cards with the highest utilisation – your score is affected by using more than 20% of your available balance. So, if you can reduce the utilisation to 20% of the total balance, you will significantly increase your score. It’s all about selecting what priorities work best for you.

Credit cards are great for building credit score, but remember never to use them as an excuse to spend more. If you find it hard to control yourself, put one or two recurring bills (like your phone and Netflix subscription) on your credit card, set up a direct debit to pay it off in full every month, and then hide the credit card in a safe drawer at home. This way, you’ll build up a credit score without spending any more than you normally would.


Consolidate your student debt

If you have a few sources of debt, consider consolidating. This means putting all of your debts into one place, so you only pay one monthly amount.

This is particularly useful for credit card debt. But be careful: transfer deals are often temporary and you should only do this if you can pay off the highest debts you have on your credit card within the low-interest transfer period. If the card reverts to a higher standard interest rate, you may end up adding to your debt. Exercise caution.


Have a side gig

Whatever you can do to scurry away some cash will help alleviate some stress! There are lots of ways to earn some extra money on the side of a “proper” job, and alongside your studies, to make those repayments easier.


Remember to treat yourself

Okay, debt is a pain. But don’t forget that you can still do fun things – often they cost very little or nothing at all if you’re smart about it. Book outings with Groupon, for instance, and make sure your life isn’t centred around your debt repayments.

Love reading? Make use of your local library – many of them even offer eBook loans these days. Plus, you can often rent films and games from them, saving you pots of cash in the long run!

Exercise for free by getting a couple of simple items (balance ball, skipping rope, mat) and save on gym subscriptions by doing it at home. Or, take up running – or simply walk everywhere. If you commute to uni campus, get a bicycle – it’ll save you on bus fares and keep you fit.

In the colder months, check out free local museums and landmarks in town with friends. When it’s warmer, take a picnic and have a day out in the park.

Relieve stress by keeping active, social, healthy and having fun!


All in all, debt is something that can be intimidating – but it’s also something you can manage. Remember to have a balance in all things. Leave yourself the space to keep living your life and enjoying your student days.


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Jasmine Birtles

Your money-making expert. Financial journalist, TV and radio personality.

Jasmine Birtles

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