Money Matters

Developing Financial Capability

Student Funding Office

Aim of the session

To help you understand the basics of financial management and budgeting

To encourage you to actively take control of your finances

To provide some practical hints and tips on managing your money

Learning Outcomes

Make informed decisions in relation to money

Develop a sense of financial responsibility

Expand your skills through budget preparation and an awareness of cashflow

Our role

We are not financial experts

We are here to teach you basic money management skills

We can also provide information, advice and guidance on sources of student finance and other means of support

What is Financial Capability?

Planning ahead

Keeping track of your finances

Making informed decisions about financial

products

Staying up to date with financial matters

Managing your money

(making ends meet)

Why are these skills important? Evidence of strong association between financial

capability and psychological well-being

Students now face more financial responsibilities than ever before

Need to be able to maximize entitlements and know where to seek advice when financial difficulties arise

Students more confident about their finances may also be more likely to complete their course and get a job in the future

Down-shifting your groceries

Alternatives to branded goods do exist. So, rather than going without, down-shifting may be an option. Give it a try and see what works for you:

PG Tips (80) £2.20 Fairtrade Tea £1.58

Mince Beef £2.88 Tesco Value Mince £1.21

Hovis W/meal £1.22 Tesco W/meal £0.75

Braeburns (6) £1.25 Tesco Value Reds £0.68

Tropicana £1.99 Tesco Pure Orange £0.86

Your bank account Open up a student account (or transfer existing

one) to take advantage of any offers and lower banking charges, but choose one that suits your needs

Don’t assume you have an interest free overdraft – you need to ask first

Don’t go over your agreed overdraft limit! You won’t enjoy it and it can be a painful experience on your wallet as you will be charged a hefty penalty

Your cash card

Always use a cash machine that doesn’t charge you for withdrawals

Don’t take money out of your account you don’t need

Check bank statements regularly and keep receipts. – Sign up for internet banking or arrange to have your

statements sent to you at regular intervals

Report a loss straight away, even if you think it’s in your own house. Fraud can occur anytime, reporting it does not cost you anything.

Consider leaving your card at home if going out for the evening.

What are credit/store cards?How do they work?

You can spend money instantly and repay the money back to the company at a later date.

Companies make money from the cards by charging you interest on the money you do not pay by the set date– Annual Percentage Rate (APR) applied to

instalments– late penalties

Benefits of credit and store cards

Cards are a simple and handy way to pay for goods rather than carrying cash

Credit cards can provide an easy way to get short term credit for free if you pay off the amount you owe monthly and you can build up a good credit history

Some card providers give special discounted offers, cash back or loyalty points to card holders for purchases

Enables you to shop on-line with confidence– Purchases are protected

The risks of using cards

You could run up debts you cannot afford to repay or overspend and start using your overdraft without realising

If you only pay the minimum amount each month this is an extremely expensive way to borrow money

Late payment fees are added to your overall debt and store card interest rates are very high (typical APR of 29.9 %)

Ultimately if you fail to make the minimum payments the outstanding balance can be demanded and you could be taken to court if you cannot pay– CCJ may be served– House is black listed

The Golden Rule

TO PAY THE CARD OFF IN FULL EACH MONTH, SO YOU’LL NEVER

PAY INTEREST.

Credit card choice

Loyalty credit cards are ‘the best’ way to spend

Choice the right card for you: www.moneysavingexpert.com/cards/cashback-

credit-cards

Find out the true cost of not clearing your credit card by using the calculator: www.whatsthecost.com/creditcard.aspx

Budgeting

The principles of budgeting are simple…it’s putting them into practice which can be hard

Most people don’t know what they spend on items each month

An accurate personal budget will help you make the most of your money

It will show you what your income and expenses are, help cut out unnecessary expenses, save money or stop running up big debts!

How to budget

Start by working out what you have coming in

Then make a list of things you need to pay; check recent bank statements, including direct debits and standing orders and recent bills

Finally, include estimated amounts for unexpected and occasional costs e.g. Christmas, birthdays, dentist, going out etc

How to budget cont’dRemember: you may have different circumstances over the summer

e.g. no statutory support, wages, no course costs, parental rent etc. so you will have to bear this

in mind when calculating your budget

Work out the total income/expenditure for a full year by multiplying your weekly income/expenditure by 52 (for weekly) or 12 (for monthly)

Tips

Be honest and take it seriously Look at your priorities

– if there is a shortfall can you cut costs– Are you entitled to other support

Where possible, pay in instalments

Personal financial recordsThese should generally be kept for at least 1 year

Bank/savings account statements, credit card statements, loan agreements (including SLC notifications) and wage slips

P60s and P45s (should be kept for 7 years)

Receipts and guarantees

Utility/phone bills, car/home insurance, etc.

Enables you to manage your debts, prevent fraud, check for mistakes, assist with budgeting, make sure you get paid what you are entitled to

For tax returns and queries

In case you need to return items and to check for any mistakes

Makes sure you are getting the bests deals. Assists with budgeting and to check for mistakes

Top Ten Tips 1. Use a budget planner2. Put money aside for bills and pay them on time3. Don’t go over your overdraft limit 4. Remember the Golden Rule when using credit/store cards5. Use the library or buy second hand books6. Take advantage of student discounts, online vouchers and

shop around for the best deals on services e.g. mobile phone contracts

7. Prepare a shopping list, stick to it and don’t be a brand snob and never shop when hungry

8. Make your own sandwiches and cut out the takeaways and ready meals…you’ll save a fortune

9. Choose wisely – if you can’t afford it don’t have it or choose an alternative

10. COMMUNICATE – with family, relatives, friends & your bank

Where to go for money advice & support

Finance OfficeMonitor & collect all your tuition and

accommodation payments

The ARC in the GuildOffer free advice & representation on a wide range of issues including finance

Student AccommodationOffer a wide selection of

accommodation and services to suit most budgets

Student Funding OfficeProvide information & advice about

financial support available

ISASProvide support & advice to international

students including your finances

Academic & Student AdminProvide front-of-house support to you

via Enquiry Services

Useful links…

www.as.bham.ac.uk/funding

www.moneymatters.bham.ac.uk

www.payments.bham.ac.uk

www.direct.gov.uk/studentfinance

www.moneysavingexpert.com