How students can handle financial hardships during COVID - 19

Due to the COVID - 19 pandemic the year 2020 has come to a sudden pause. Due to the lockdown, both normal lives and the world economy faced a massive blow. Unemployment has shot up due to the pandemic effect. Unfortunately, among them, some students also lost their part-time jobs. A recent NUS report also stated that 80% of UK students are still struggling with their finances due to the COVID-19 outbreak.

Why are students facing financial hardship?

• The overall income has been reduced – Due to the lockdown, many offices and businesses have closed their gates. As a result, overall employment options have compromised. So, students do not have many options to find a part-time job and increase their income.
• Lack of employment options after graduation – Only a limited number of businesses are functional during the lockdown, and they aren’t interested in hiring graduate students at the moment with a high salary. The possible oncoming recession is the reason why companies have taken this decision to maintain a low cost.
• Unaffordable rent payments – Lack of income triggers financial crunch which eventually affects affordability. That’s why students have moved back home due to the unaffordable rent payments.
• Full tuition fees – Income options are getting limited but the student loan debt payments are constant. On May 4th, through a  government announced declaration, it was informed that UK students would have to pay tuition fees in full even if universities are still closed by the Autumn.

So, let’s have a look at how students can manage their finances during this pandemic.

a. Track your expenses and unnecessary spending

You should make a list of direct debits that happen every month from your account. You may use online apps to track your expenses and cancel unwanted subscriptions to reduce monthly outgoings. This method will be useful for you if you maintain multiple bank accounts.

You should cancel the magazine subscription that you never use. If you have any app that requires a monthly payment, but it is useless for you, then you should plan to end that app subscription also. 

b. Make an emergency budget

If, as a student, you want to create an emergency budget, then you should prepare a list of all the upcoming incomes you have, such as - maintenance loans, gifts, grants, or cash from parents. You should also add all the expenses such as food, rent, medical bills, credit card bills, travel, tuition fees, etc. Calculate how much you have in hand at the end of the month. This way calculate each month's savings and save it as an emergency fund. Try to save more than the previous month every time.

c. Pay your credit card debts timely

Students should repay their credit card in full within the due date each month, if you have one. If credit card bills aren’t paid on time, you will be charged interest on the balances on your cards. If you withdraw money from your credit cards, interest will also be charged on that cash advance. The interest rate will be quite high and it will be added in your monthly credit card bills.

If you want to repay only the minimum monthly payment on your credit card bills, then additional interest will be charged on the balance amount. Apart from that, it will also negatively affect your credit score.

So, paying off your credit card bills timely is a great way to resolve debt and improve credit score as a student.

Author

Patricia Sanders is a professional content developer and a regular contributor to debtconsolidationcare. She specializes in the financial niche and is well known for her unique financial tips that can be very effective. She always tries to help people, suffering from financial hardships, through her writing. Her continuous effort has earned her recognition and honor in the financial blogging industry. Besides writing, she loves to travel and gather information on various financial topics. To get in touch with her (or if you have any questions regarding this article) email at sanderspatricia29@gmail.com.