The maintenance loan is never enough.
It pains me to hear students I meet and friends tell me they’re having difficulty surviving on their maintenance loan. That they’re seriously struggling to make ends meet, and on top of that they need to study for exams. It’s not nice to have to deal with this at such a young age; you’re suddenly thrown into the real world and you already feel lost. I get it.
My aim with this post is to help you make the most of that maintenance loan, really squeeze out every pound and make it work for you. Then after that, some tricks to make more money, since in most cases more is really what is needed.
Wait.. what a is maintenance loan?
The first step to managing a maintenance loan is… understanding it. Sorry folks, but that’s the key to pretty much anything these days.
You can check out my well written (if I don’t mind saying myself) guide on student loans to get started.
But here we’re going to dig a bit deeper into maintenance loans. Your overall student loan is supposed to cover the tuition (£9,125 a year) and your day to day expenses. Your maintenance loan is the name of the loan for those day to day expenses.
Not everyone takes a maintenance loan out. In fact, the amount you get depends on how much your parents earn and where you are (so it varies… a lot!). Here’s a table to give you some idea:
Here’s a student loan calculator to figure out how much you could get.
You normally get paid in three instalments: January, April and September.
You can also get an Additional Maintenance Loan if your course is longer than 30 regular weeks and you can get Extra Student Maintenance if:
- Your parent is single with a child under 20 (you)
- Married couple in education with a child under 20
- Have a disability
- Qualify for housing benefit
- Unable to work for 28 weeks.
For more deets check out the Student Finance website.
So if you’re going into university this year, you should have received your maintenance loan or are due to receive it soon (writing this September 2018). This number will cover you for the next 4 months, remember that. And yes, it’s hardly ever enough.
‘How do I make sure I use it adequately?’
Well here I am, friends, to show you how:
1. Keep it somewhere safe
You know yourself (hopefully). You know if you have the discipline to not spend it all at once or not
If you don’t have the willpower to not spend all your loan at once, you need to have a system in place so the money doesn’t disappear immediately.
Use one bank account as your day to day expenses for the month, and the other to keep your money safe and away from you. Preferably your safety account doesn’t have a card, making it much harder to spend.
Then, when you get your instalment, you take your loan and divide it by 4. And that’s your budget for the month, which should go in your day to day expenses account.
2. Do a lil budget
So now you know what you can spend for the month, but still you need to figure out how you can survive on that.
Once again, check out the Student Guide: Budgeting.
My recommendation: download the app Money Dashboard and link it to your day to day expenses bank account. Then, set up each budget for every different category you’re spending on.
Here’s an example:
This is the website dashboard version, but it looks the same on the app.
Prioritise your expenses. The first thing you should pay for is rent, then food, then books, then transport and then fun. Don’t have enough for fun? More on this below.
Great! Now you know how much you can spend on each category. But I know many of you are probably saying: THAT IS NOT ENOUGH!
I have a friend who would have to live on £600/month, and another one on £430/month – all including rent. That’s absolutely crazy, but it’s because the Student Loan Company expects your parents to help out with the rest. But of course, that’s not always going to happen.
No matter how much you budget and try to save, sometimes all you really need is more money. Well you’re in the right place to figure it out.
3. Make more ££
Financially Mint has TONS of resources to figure out how to make more money in university (there’s even an entire category on it). I’m going to list in order of priority the steps you should take to earn more money:
- Scholarships and bursaries: Free money! What could be better than that?
- Matched Betting: I’m a little against this, but it’s also quick money. Here’s my review on it and here’s how to get started.
- A student job: Not the best, but will get you earning money fairly quickly
- Freelancing online: Takes a bit of time to earn well, but the skills are for life
- Building a business: Take a lot of time, but skills are also for life
These are the main options I would say you have. You may know others which work better and more efficiently (comment them below!).
When you get enough to live on, add it into your budget and make sure to cover the priorities before the ‘fun money’. Your priorities should then be:
- Rent + bills
- Savings (15% rule!!!!!)
- Fun money
Yes savings become a priority because they allow you NOT to live paycheck to paycheck.
You’ll always have a cushion in case something happens, and you can also use that money to treat yourself in the future: a snazzy trip, some cool gadget, etc.
Sometimes we get a little stuck. Like u/MLG-Monarch from our subreddit group, the payments sometimes don’t coincide and you have to pay for something before you have the actual money. Your parents can’t really help and you feel stuck.
First, I tell you, don’t panic. There is a solution.
Student bank accounts.
*queue dramatic music*
Yep, student bank accounts could be your ‘get out of a sticky situation’ card. If you have a bank account with HSBC, Barclays or Nationwide you can get a 0% overdraft of up to £3,000! And with other banks you can get similar deals. This can really help you: use the overdraft, complete the payment and the pay back the overdraft when you get your income. Bam. Here’s a nice list of them.
Another option is credit cards (a guide to use them well), but they will certainly not give you 0% (I applied for one and its APR is a whopping 49.9%) – you are a student with probably a low credit score. So just stick to overdrafts for the moment.
Here’s a cool infographic (Pin it!!!)
By following these steps you won’t feel like your drowning amidst expenses. Do some careful budgeting with Money Dashboard, look for ways to earn more money (freelancing!) and use your overdraft in case of emergency.
Still feeling helpless? Send me an email, or a message on Twitter/Instagram/Facebook. My mission is to help students manage their money and life in university, and so I will always do my best to help you.