If you’re a recent graduate in the UK, your finances are likely reeling as an effect of studying in one of the world’s most expensive educational systems. Just last year, the average student debt was around £50,000, with an additional 6.1% of interest added on after students got their first payment. But what if you’re still a student? Are there ways to improve your financial situation even before you graduate?

One of the best things you can do is take note of the common money mistakes you can make – and of course, how to avoid them.


overspendingWhile borrowing to pay off necessities like university tuition is required, spending on luxuries can rack up unnecessary debt very quickly. Furthermore, a Claris survey found that overspending in your twenties can be one of the worst financial mistakes for young people. In the study, 1 out of 7 in the study says they regret “living large” while they were younger.

Not researching properly

When you become a student, a wealth of financial options are open to you. Yet, beware falling into the trap of committing to accounts you don’t need in the first place. For example, it pays to make sure that you research things thoroughly if you are thinking about getting a student credit card. ThoughtCo’s introduction to sensory marketing explains how research shows that up to 90% of impulse buys are based on the colours used in campaigns. This is why banks are so effective in getting students to sign up to credit cards and accounts they don’t actually need through visual promotions.

Verizon Connect explains how it takes as little as 150 milliseconds for our brains to process images, whereas processing words takes twice as long. This can lead to students not even reading the small print and finding themselves with a credit card they don’t need because they only saw the promotional descriptions. So, take a moment to step back and reconsider to prevent money problems later on, especially if you find yourself constantly overspending on things you don’t really need.

Putting off building credit

Student money managementOf course, the fear of debt can drive some students to stay entirely away from credit cards, which can also be a mistake. Why? Because it pays to start building a credit history as soon as possible. In the eyes of lenders, having zero credit history can sometimes be worse than having a terrible credit one. This will affect your financial options further down the line. Therefore, be aware there are safe, easy ways to build credit history even at a young age.

Becoming an authorised user on your parent’s account is a good first step. Alternatively, you could also apply for student credit cards, offered in the UK by providers such as Vanquis and Tesco. They usually offer lower credit limits in comparison to regular credit cards (between £500 and £1,500). Also, paying your credit bills on time is a great step towards a respectable credit score. Just ensure you heed the above and get the right credit card for you.

Not considering the financial risks of post-grad

Managing your money after graduatingSometimes earning an advanced degree makes sense, but this really depends on your field. Many teachers, for example, get an automatic bump for having a Master’s or a PhD. Yet despite the benefits, The Guardian’s piece on PhD loans cites that only around 70% of PhD candidates manage to complete their degrees. It also notes that even with loans of up to £25,000 coming from a prospective UK/EU loan scheme, it would still be difficult to stretch it out amid four years of tuition fees and maintenance costs.

Obviously, each case will be different. But the best thing to do is be as objective as possible when analysing the risks. It’s an extra credential but is it worth going into more debt and possibly missing years of work? It’s crucial to weigh up the risks against the sacrifice.

Thanks for this guest post go to our friend, freelance writer, Alyana Cabellero.