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Managing Your Student Loan

By: J.A.J Aaronson - Updated: 17 Dec 2010 | comments*Discuss
Student Loan Management Budget Budgeting

Your student loan is likely to be the largest sum of money that you have received during your life thus far. It is very easy to get carried away thinking that your loan will carry you through university and enable you to live the spendthrift life. The problem is that, by its very nature, a student loan tends to be given to people who have fairly limited experience of the practicalities of day-to-day independent living. This means that, quite a lot of the time, the recipients of such a loan are in for a shock. There are plenty of ways, however, of mitigating this shock. Effective management of your student loan can mean that, while it will certainly not be easy, making your way through university need not be financially impossible.


One of the most important things that you can do in order to manage your financial situation is to budget. Many people associate budgeting with big business and lots of work, but the process need not be overly complex. It is unrealistic to imagine that student life would permit you to budget for every single one of your expenditures (you need to have a social life, after all), but it is certainly possible to work out what your large and regular outlays are going to be, and to work the rest of your spending around these.

When budgeting, you should begin with your largest expenditures. It is likely that you will have to pay your tuition fees and if you are paying for your own accommodation then these will probably be the largest of your living expenses. After this you might put food (or alcohol, depending on your lifestyle!), or perhaps any course expenses if you are doing a practical subject like art. Whatever your largest expenses are, you should list them from the largest down. Make sure that you are honest with yourself; a comprehensive budget will pay dividends in the long-run, regardless of how depressing it might look at the minute.


Once you have added up all of your expenditures, you can balance this against your income. It may well become clear at this stage that you will have to supplement your cash-flow in some way; many people take on part-time jobs during university which, while making their workload heavier, are often the only way for many people to afford to study. Regardless of whether or not you need to take on a job, your budget should show you how much available cash you have. Many people find that the most useful thing to do now is divide this sum into months, and perhaps then even into days. This can make working out how much you can spend on a day-to-day basis much easier, as a definite daily threshold can be much easier to keep to than a slightly vaguer weekly or monthly limit.

Above all, the key to good financial management is self discipline. No-one is expecting you to live a life of drudgery for three years, but some canny planning can help you to do the things that you need and want to do.

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