The novel coronavirus has caused 2020 to come to a crashing stop. With this pandemic coming in, the economy has taken a massive hit leading to a global lock down. It has led to some of the adverse effects like cancellation of festivals, making public transport a no-go, compulsorily wearing a mask, the shutting down of non-essential stores and restaurants.
Many students work part-time for their livelihood and unfortunately, this pandemic has cost their jobs. It is difficult to survive without a job, and students have been struggling financially in these challenging times. Statistically, it is said that almost 80% of students are struggling financially.
This pandemic has led to financial instability for most of us, especially for students who work daily and support their daily needs. Every business and retail chain has been affected, which in turn affects its employment opportunities. The supply is much more than the demand.
Therefore, here are a few tips on how students can manage their money efficiently during this period:
- Check on unnecessary spending
One of the easiest and the most effective way is to keep a check on the amount debited from your account as it will help to reduce your spending.
Once you keep a check, you will realize as some of the expenses being done monthly can be stopped and postponed instead.
One of the ways to keep track of your payments is the online banking system. Alternatively, an application can be used to find and cancel unwanted subscriptions and track your monthly outgoings. This method works out best in multiple bank accounts.
Its primary benefit is that you can freeze payments on services that are not required anymore and can be discontinued. Once the situation gets better, you can always start with your payments on one click.
- Use a money managing app
Online banking is a good option in managing your money, and they help you save, budget and track your spending.
These apps are free of cost and help you quickly split your money into savings, bills and spending money. Also, a money managing application identifies ways to save money based on your current spending.
Another feature offered by these applications is that these apps take note of the stores you shop in and will intimate you in the future in case of any voucher codes are available. It helps you save by comparing your utility and insurance providers. It also helps you earn rewards from various retailers.
- Timely Credit card payment
Paying your bills in full is the right idea to avoid the banks charge any extra amount. Upon non-repayment of the bills, a higher interest rate is charged even on the cash withdrawal on the credit card. You should avoid credit cards if there is no urgency to borrow money in your life.
Interest-free overdraft is offered if you have a student discount. This can be useful as a quick buffer when needed. Check your overdraft limit because if you surpass your overdraft limit, it levies hefty charges.
Though your overdraft can be very useful in times where your regular income has not come in, and you need money at an instant, bear this in mind that overdraft is a loan and has to be repaid. Its interest rate usually surges as soon you finish your education (i.e. graduation), hence make sure to pay it back as soon as you can.
- Alternate ways of entertainment
Enjoying the night with friends with a few drinks is a long lost dream. With the advancement of technology and the pandemic is coming in, favourite streaming service, which although it is generally less exciting, can be a very effective way to save money.
Another way is to recreate your favourite restaurant food to learn some new culinary skills. Although, if you decide to take the occasional takeaway, you tend to spend less than you would on a restaurant meal and you can save money on drinks too.
- Supermarket shopping
Budget supermarket shopping is easy to do. Before going to shop, prepare a list and stick to it.
Another option is to eat before going to the store. You can try a lower price supermarket offering similar products for less.
- Emergency budget
Make a note of all the incomes and prepare an emergency budget. An emergency monthly budget can be compiled if you’ve identified your spending heads.
If you ever fall short of money, you can always rely on this budget. It will also keep you aware of where you can cut down on your spending.
- Eligible for larger student loan
During this pandemic, if your parents’ income has dropped by at least 15%, you may be eligible for a larger student loan or grant by the government.
The amount you are eligible for a loan is assessed on your parents’ household income of a stipulated income. If that income has changed significantly, and you’re studying in the UK, you can apply for a Current Year Income Assessment.
Many financial institutions provide debt consolidation loans with bad credit is not an issue. The facility of no guarantor is also available.
All in all, banks and financial institutions to provide financial independence to students who are going through a financial crunch but want to do something bigger in life offer loan facilities.