Being a student is hard. Being a student in the middle of a global pandemic? Yeah, harder.
Not only are today’s university students finding their education has moved online; from remote lectures, online classes and even online exams; but the whole nature of the IRL university experience has changed. Gone are the student union bars, the parties, raves, club nights and balls. University life was not designed to be enjoyed at a two metre distance. Much like almost everything else in 2020, student life seems cancelled.
Olivia Scuddder, 19, has just finished her first year studying media and communications at Loughborough University. It was certainly not how she imagined her first year at university.
“I loved the time I had at university,” she says, “I made great friends, really settled into uni accommodation and uni life very well. After the pandemic hit, we all went home and everything went online.”
While she praises the organisation and creativity of her new online education, it has hardly been an ideal end to her first year.
“Although the teaching has remained great, it’s definitely been hard without face to face contact,” she says, “Also really miss the social aspect. I really miss the amazing friends I’ve made.”
But perhaps one of the most worrying aspects of the university experience to be affected – and profoundly considered – at this time, is student finance.
When our money matters more than ever in these trying times, students are facing these realities in a whole new way.
Olivia prepared for university with a part-time job, and saved most of her earnings for her first year.
“I like to think I’m quite good at organising my finances,” she says, “Before we started, my university showed us before how to allocate money, work out our expenses and where your money should go and that was super helpful. For me, it’s down to just knowing what I am prioritising and keeping track of where I am spending my money.”
“Thankfully, our university was really good and didn’t make us pay for our accommodation for the last terms at all, which is great as we have all had to move home,” she says, “I’m really hoping to move back in September, but it’s all very uncertain at the moment.”
I ask Maike Currie, director at financial services company Fidelity International and the author of ‘The Search for Income: An Investor’s Guide to Income-Paying Investments,’ what the financial landscape looks like for today’s students.
“I think Covid19 will add another layer of uncertainty and financial burden at this time. I think there will be a direct comparison to the generation that graduated right into the recession and the financial crisis,” she says, alluding to the 2008 credit crisis; “That was a time of huge job losses and economic uncertainty and today’s students will be facing a very similar- potentially worse- situation.”
The financial destruction wrought by Covid19 on the UK economy may seem a distant and vague notion, but it will have real consequences; particular for students:
“To study right now, you’ll be taking on massive student debt; about £27k and that’s without living expenses,” says Maike, “You are going to be leaving with all that debt and entering into a very unstable job market, where getting on the property ladder is getting increasingly difficult and wages are not going anywhere.”
Maike can understand why many students may fear the cost of studying outweighs the rewards in this current climate, whilst others may fear the job market more, and hunker down at university.
“The job market stuff does scare me,” says Olivia, “but because I have two years left at uni I just want to ride out that storm and see what happens! I want to focus on my studies. I am hoping things might be different when I leave.”
So, what is Maike’s advice for today’s students facing an unprecedented financial crisis?
Fill In Your Financial Education Gaps
“I think the first thing we need to realise is that financial education is still not mandatory, so most people will finish their school career without ever learning about personal finance,” she says, “We also still don’t talk about money as openly as we should, and we need to.”
If ever there was a time to really tackle your finances, and address those points you know less about? It’s now.
“You have really get on top of your personal finances and engage with money in a way you may never have had to do before,” says Maike, “It’s not just about saving, it is about spending and how you spend.”
Treat Yourself Like a Company
One of the ways Maike suggests you do just that, is by imagining yourself as a company and thinking of your finances through this filter.
“When you go off to university you are probably in charge of your finances for the first time in a real way,” she says, “So the best way to do that is to think you are your own company. You’ve got to make a list- of everything you need to budget for. What will your expenses be? You also have to think of unexpected costs- the extra bits you might need like furniture and socialising. View your outgoings and then balance that against income sources- that might be student loans, could be financial support, parents, side hustles.”
Maike’s easy hack for this?
“Always think of your money in three jars: what you spend, what you save and what you share; i.e what you give to charity. If you can get those imaginary jars sorted you are on the right track.”
Find the Right Student Account
Maike’s advice is to shop around and to use comparison sites to find the account with the lowest overdraft fees. But also, don’t be afraid to branch out;
“You might be tempted to go for student accounts as they have low overdraft fees, but don’t discount the new challenger banks- they have great financial budgeting trackers that are very good at showing you what you are spending and when you owe money.”
Use Tech to Your Advantage
“Spending wisely is a real skill you have to teach yourself,” says Maike, and one way she suggests tackling this, is to look into money-tracking apps.
“Look at Monzo and Starling,” she says, “Do your research and really use technology, make it work in your favour. There are some great apps that help you split the bill with friends or ones where, the minute you spend you get the notification on your phone and you can see exactly what your outgoings are. It makes budgeting so much easier.”
She also suggests using the tech world to help with the lasting impact Covid19 has made on the job market.
“Part-time jobs are such a key part of student finance and yes, they will be affected by this,” she says, “It will be a lot harder right now but it means you just have to get creative. Use the online world to your benefit. See whether you can sell on online marketplaces like Ebay or Etsy or Depop. Find your niche online and you can find ways around a new and unstable job market.”
Save Smarter
Though Olivia’s first year at university did not go the way she planned, the one silver lining has been her savings.
“As much as there are negatives, one big positive is that it has given me a massive opportunity to save more money for next year. It was kind of a blessing in disguise,” she says, “A lot of that money has now gone into a stocks and shares ISA.”
Olivia, says Maike, has made the best decision.
“If you can save, you should because the big advantage students have is that they have time on their side,” she says, “Putting your savings into a simple cash account is not the best idea right now because interest rates have been affected, and have been going down ever since the financial crisis. The best way to see growth is by investing in the stock market. Taking the plunge with that is by opening a stocks and shares ISA. You have a very long time ahead of you and we know that over the long term, the stock market is a better investment than putting it in a simple savings account. As a student; time is on your side here.”