Student life can be expensive, and many young Scots struggle to manage on their own. We take a look at the urge to splurge and offer you advice on how to get your balance out of the red…
When Isla Fisher took on the role of Becky Bloomwood, shopping addict extraordinaire, the world rolled its eyes in unison as her spending problem spiralled out of control. Imagine having that much debt, we all laughed. Can’t she just say no to a designer handbag?
It turns out that the leading lady from Confessions of a Shopaholic isn’t that unusual – one in 20 adults confess to having a compulsion to spend, spend, spend. Overspending is rapidly becoming a problem affecting young people too.
SPENDING STRUGGLE
Leaving home to fend for yourself, buy course books, fund a social life and keep up to date with the latest trends is expensive. The average Scottish student accrues about £5,600 in debt with student loans during their university career – a figure which doesn’t include bank overdrafts, credit cards and store cards.
Some students find the switch to independence, handling their own bank balance and budgeting difficult to manage. English lit grad Emma* was one of them.
“I started uni life after having a full-time job in a bank for a year, so I was used to spending money like water and found it really difficult to make the change,” she explains. “While some people would comfort themselves with food or music, my vice was shopping. Shopping for clothes, make up, perfume, gadgets. If I wanted something, I got it.”
RECOGNISED ADDICTION
For some people, like Emma, overspending is more than just being bad with money. It can also become an addiction. Compulsive spending, shopaholism or oniomania (to give it its technical name) is an addiction which affects all kinds of people. For many, shopping is a form of therapy or a way of keeping up with your mates. But it can go too far, as Emma knows all too well.
“The majority of my house mates had a lot more money than I did and I didn’t want to be different,” Emma says. “I saw them living the lifestyle that I was used to during my gap year, but I essentially had no income whatsoever. I still had a taste for luxury and an itch to scratch. I had a ‘binge and purge’ approach, often cutting out more expensive foods like meat and eating out in favour of a bag or coat that I simply had to have.”
That behaviour has left Emma in a very tough position. After her three-year degree, she’d racked up £8,000 worth of debt in credit cards, store cards and overdrafts, something she still feels the effects of today. She’s now lives back home with her parents to save money. Each month, about 80% of her income goes towards paying off her credit cards.
EARN IT
“Remember that money isn’t something you’re given – it’s something you earn,” Emma advises. “If you’re borrowing money, you have to pay it back, and will you want to spend a few years paying back for the fun you had at uni? No, you don’t – trust me! Uni is hard financially, especially if you don’t have your parents paying your way – but if you choose to go, you need to take responsibility and realise it’s your job to finance it in one way or another.”
The fact is, money doesn’t grow on trees. Managing a budget isn’t easy, but with a bit of careful planning you can make it work and have much less to worry about when you do graduate. Take a look at our money-saving hints and tips to get you through the days of poor studenthood…
*Name changed
FIGHT THE URGE!
Being spending savvy doesn’t mean you have to become a hermit – we know how important Nando’s, gigs and cinema passes are. However, living off instant noodles so you can afford a designer splurge isn’t practical, healthy or sensible. Try these tactics to save some cash…
Prioritise
When it comes to spending, think it through. Rent, bills, travel passes and food are much more important than a new pair of Converse. Make sure you have the money set aside to cover the essentials before you go treating yourself.
Be realistic
Check your bank balance regularly so you know exactly what you have. That way you know how long it has to last you and what your weekly, or daily, budget has to be. Make sure you stick to it too – you’re a student, not the Beckhams. Say no to nights out you can’t afford, don’t go window shopping and only buy what you need if you’re feeling the pinch.
Freeze your credit card
And we mean literally! To avoid whipping out your plastic at every available opportunity, pop your card in a tupperware box, fill it with water and stick it in the freezer. It’ll give you time to pay off your debt without getting more.
Work it out
A part-time job while you study is a wise idea, not only because you’ll gain valuable work experience, but also because you’ll be less likely to need to approach the bank of Mum and Dad for a loan. Make sure you can balance your studies with your job though – it’s generally recommended that you take on no more than 12 hours a week in part-time work to allow time for lectures, tutorials, reading and essays.
Ask for help
If you do run into trouble, don’t be afraid to speak up. Your parents might be angry, but they’ll help if they can. Your student finance office will be able to offer advice too.
FIND OUT MORE
Barclays Money Skills
www.barclaysmoneyskills.com
Financial Ombudsman
www.financial-ombudsman.org.uk
Student calculator
www.studentcalculator.org.uk
