Money Management

Sources of Income

Students can have several sources of income, but the primary sources are student loans, bursaries, scholarships and part-time jobs. Information on student funding is available here or from Ask.
If you need help to find a part-time job, then contact the Student Employment Service www.careers.strath.ac.uk/ses/student/ or on level 5 of Livingstone Tower, who can help you find something suitable. You will also find adverts on noticeboards around campus, pop in to Ask if you have any queries.

Overdrafts

If you have a student bank account, you may be entitled to a student overdraft, you are often allowed to increase the size of your overdraft with each year of study. Overdrafts for most students are interest free, but shop around the different banks to find out which one is the most student-friendly and which can give you the best deal to suit your needs. Many will offer freebies to get your business but make sure you look further into it than that. Asking other students who they bank with is often the best way to get an independent approach. However be careful with stepping up your overdaft each year as when you graduate there is a limited period the interest stays at 0% and you may find the interest becoming horrendous. Also don't become complacent simply because it is interest free and avoid dipping into it if it really is only for emergency use.

Cards

In reality cards are a useful and safe way of ensuring that you have money available at all times as most places nowadays accept credit or debit cards. In general it is better to use DEBIT cards, since with these you are only using money that you currently have in your account as opposed to building up a bill which you will be faced with at the end of the month. However even with Delta, Solo and Switch there can be problems as more than one direct debit can go off on the same day and you could go over your limit therefore incurring bank charges, so try to know how much money is in your account.

With regards to credit cards, the biggest problem here is the interest and below is outlined the traps you can fall into if you have to select a credit card.

Credit

Although credit is a good way of helping you manage your current costs and ensure some sort of backup plan, it remains a debt and may cost you far more in the long run to have this service. If you do need to use credit, shop around carefully for the best deal and make sure you read the small print before agreeing to anything. Credit agreements are legally binding under Mercantile Law and are generally more costly than overdrafts.
Don't be fooled by 'special offers' where a set amount of months are interest free and then the interest charge jumps substantially if you haven't made your payments within the interest free period.
With regards to credit cards, if these are for emergency use then try and set a lower limit and don't fall into the trap of using credit instead of switch and promising to pay it back later, as it is very easy to forget and then become shocked by the bill. Also an absolute no-no is taking cash advances on credit cards as they begin to charge a high rate of interest from the actual day of withdrawal. Travellers cheques are usually classed as 'cash advances' by credit card companies.

Store Cards

Try to avoid these at all costs

They may seem like a good idea and you may be promised 10% off your purchases by applying for a store card, or invitations to special store nights.
Firstly, the store may insist that the initial purchases go straight onto the card and you can pay the bill when it arrives at your house. It is always best to pay up front if you have the cash ready as this way, you are not caught short later in the month. Many stores will tempt you with a 10% discount, but students already receive discounts in most places anyway. If you are going to take the store card for this reason then make sure that the discount is worthwhile applying for.
Again some store card companies such as 'Style' can send a pin number whereby you can take out cash advances on your store card. Like Credit Cards the interest often begins immediately and you could face a hefty chunk of interest when the bill comes through.
If you do have a store card and are finding the payments to be a hassle, the best thing to do is to cut the card up and pay off the bill as soon as possible. This way you cannot continue to accrue any debt other than interest on it.

Payments on Cards

If you do use a credit or a store card then it is crucial that you continue your monthly payments. Missing payments or making late payments can result in several penalties.
For example, here is a scenario that happened last year with a student:

• The student had 2 direct debits due to go off in the same day,
• One direct debit was taken and took the student over her overdraft limit, she was charged £10 by her bank for doing so.
• The second direct debit was rejected and the bank also charged her £15 for the referral charge to send the direct debit back.
• The company added £10 to her bill for the refused direct debit
• The company also sent a letter demanding payment and informed her that a further £25 has been added in the form of an administration fee for sending the letter.
• She accrued interest on all of these extra's being added onto her store card.
  Therefore this student accrued about £65 worth of debt for being unable to manage her direct debits effectively.
  If you do have cards or responsibilities which require a direct debit, try and arrange for the date of payment to be the same day or the day after you are paid, or know there will be funds in your account. This way you start the month knowing exactly how much money you have to live on.

  Credit blacklisting

Consequences of making late payments or failing to pay direct debits, or bills in general mean that your details can be stored on a database, and you could be blacklisted or refused credit in the future. These scenarios can last for years to come. Other agencies are able to access these files as well to determine whether you are credit worthy or not.

Unable to pay?

If you are experiencing trouble making your monthly payments then it is important that you address this problem as soon as possible.
You could contact the lender and explain your present circumstances. Very often they will reduce your payments for a while or arrange a different method of repayment. It serves their interests to get regular payments rather than none at all, and very often the cost of litigating for repayment is too great and results in a sheriff ordering nominal repayments anyway.
It is important that you can recognise the problem and address it as it won't go away if you ignore it. If you seek advice then you can manage the problem and avoid further stress.
If you would like to get help with any of the above problems then you can contact one of the advisors at Ask to make an appointment or drop into the office in The Lounge on Level 5 of the Students' Union building on the John Anderson Campus, or behind Toby's Bar at Jordanhill.