managing your cash

If you’ve finished with college and are out navigating the world by yourself for the first time, whether that’s moving away to uni or taking on an apprenticeship scheme or a full-time job, we know that cash flow issues can always be a bit of a downer.
 
Depending on your circumstances, we’ve got loads of tips on making the most of your cash, and any financial support available to you.

For example, young people might be entitled to…
 

• Student finance, including tuition and maintenance fee loans
• Government grants or bursaries
• Institution bursaries and scholarships
• Bank account incentives
• Tuition funding on degree apprenticeship courses
• Emergency financial support
• Universal credit and fee exemption

 
Sounds great. But we know that sometimes it can seem impossible to keep out of the red and safely in the black when it comes to your bank balance, even with the extra help. In that case, a pre-arranged overdraft might have your back in the last terrible run up to payday. 
 
Though we’d never advise relying on it, we’d be lying if we told you that overdrafts weren’t an occasional tool in most young people’s arsenal. 
 
And there’s not much wrong with that. Know what (if any) interest you’re paying on what you’re borrowing, know your bank’s overdraft limits, and make sure you’re not spending more than you can afford to pay back in the short term, and you’re golden.
 
As long as your repayment is in sight and your OD spending isn’t too frivolous, use it. It’s meant for responsible cash flow emergencies. 
 
Before we sing their praises too much though, be aware that major changes are coming to the overdraft system by April 2020. Some banks have even rolled the changes out already.
 
The Money Advice Service wrote a handy article. last month outlining what’s to come:
 
‘There are three main changes being introduced which will affect your overdraft.
 
1.     Interest on all overdrafts will be charged at a single annual interest rate (APR).
2.     No daily or monthly fees for using your overdraft.
3.     The same interest rate for arranged and unarranged overdrafts.
 
This means you might lose your interest-free overdraft and overdraft buffer. However, to be sure, you will need to check with your bank.
 
Not all banks and building societies have announced what their interest rates will be. However, the ones which have already announced the changes, are charging between 15% and 40%.’ 
 
So what does this really mean? If you’re only using your overdraft for the odd rainy day, it’s likely that it won’t cost you more in interest than it already does. But if you’re living in it for most of the month, it might end up costing a fair bit more. 
 
If that sounds a little too close to home, there are a few things you can try to keep on top of your finances and make sure you don’t dip below zero more than you need to. 
 
For starters, download your mobile banking app and get alerts set up to let you know when you’re getting close to the bottom line. You can also go to your bank for advice on money management and overdrafts. 
 
Sticking to some sort of budget is a good idea too. We know, it’s hard. But things like big weekly shops, batch cooking and bargain nights out are a great way to think ahead and spare your hard-won cash. 
 
Remember: keep an eye on your cashflow, know who you can go to for financial support, and don’t bury your head in the sand when it comes to money woes. 

Author

LUCY HARDING is an English Literature grad and an MA Publishing student at UCL. She is passionate about international relations and cultural diversity, having worked closely with her university’s Erasmus society to support European students. She also spent a year abroad studying at California State University: Long Beach