How To Get Out Of A Financial Crisis As A Student?

Whether you are graduating or in your post-graduation years, stabilising finances is challenging. Multiple bills, rent, groceries, repairs, etc., exhaust the essential savings. Moreover, emergency expenses further make it worse for you.  Minimal income makes it impossible to pay for that. 

This tightrope makes you think- “how can I get out of this financial trouble?” Navigating is hard when you are in the early years of your student life. However, the blog may help control the situation. It lists some expert tips for dealing with financial crises as a student without worries.

How many students drop out of university due to financial stress? 

According to Experian data, “1 in 5 students plans to return back and transfer to a nearby university in the native country.” Additionally, two-thirds of students express a desire for regular medical support at the university. 

All in all, 78% of students believe that money management is the biggest reason for stress. 46% of these fear checking their bank balance, and 23% ignore communications with the bank entirely. Here are other surprising statistics regarding student and financial management that generate serious concern: 

• 14% of students want to drop out of university due to affordability issues

• 20% of students increased their credit card usage for minimal requirements

• 46% of students are anxious to check their credit scores

• 33% of undergraduates seek crisis loans from university support officers

Moreover, Jogn Webb, a Credit expert at Experian, says, “Trying to make student loans stretch over to cover living costs can prove stressful. At the same time, they started using new credit cards and initially arranged overdrafts.”It may prove problematic from a financial perspective later. 

5 initiatives to Take as a Student Under Financial Problems

The first step to consider here is seeking hardship funds from your university. The authority decides the amount you get depending on your condition. In most cases, you don’t need to pay it back. Students who may generally qualify include- single-parent students, disabled ones, low-income families, and mature students with financial commitments. Here are other aspects that might help: 

• Get cash against benefits income

Most students living on part-time income use government benefits. It could be shelter facilities, help with utility bills, or rent. However, you may get unemployment benefits if you lose your basic job due to an accident or layoff. You may get loans for people on benefit income to fund basic expenses. For example- if you have a utility bill due, you can repay it using the loan. The amount you get stays sufficient to meet small needs. You can repay the dues in comfortable installments. You don’t have to stake collateral or get a guarantor to qualify. Just a benefit salary proof may get you loan approval.

• Consolidate some debts 

You may be thinking- “how does paying off the debt eases financial troubles?” It is especially when you lack the basic savings to do so. Well, with debt consolidation, you don’t need to pay anything upfront. 

Instead, you can merge your debts into a single repayment system. It helps you save on interest and monthly payments. Decide the debts that consume the highest portion of your monthly income. It could be credit card debts, mortgages, or car loan payments. 

You don’t need to consider a mortgage here. Instead, merge the payday loans, credit cards, overdrafts, and other debts. Analyse the best module and check how much you can save. Go only if the arrangement helps you save good money on interest and total repayment amount.

• Understand your tenancy rights

Some aspects prevent you from paying rent on time. It could be low income, high monthly expenses, and emergency expenses. Such things leave you with little money to pay for the rent. 

However, ideally, you must set direct debit for such an important aspect.  Here, you must know your tenancy rights. What are you capable of if you cannot pay the rent? Here are some tenancy rights that you must be familiar with: 

1. The landlord must provide fire safety in your rental property
2. Your landlord cannot visit the property without warning
3. The appliances must be installed carefully
4. Landlords and tenants are responsible for the pest control
5. the landlord is responsible for the property structure, sinks, baths, hot water, and gas appliances. 

When can a landlord evict you? 

• The landlord may evict you if you are 2 months late on rent payments
• Being regularly late with the payments
• Breached the terms of the contract
• Leaving the property in an unacceptable state
• Subletting a room without permission
• Causing serious trouble to the neighbours

• Seek alternative job options 

It is the essential aspect that may help you improve your basic savings. Identify how much you can get with multiple part-time jobs. For example, if you could save £200 from a job that pays £4000, having another job for £4000 would help you save £200 more. 

Therefore, you may save £400 in total per month. Analyse the aspects that may help skill up and get hands over better-paying job opportunities. Increasing the salary may help you boost your basic savings. 

Identify your student schedule and check the flexibility. How many hours can you dedicate to the job? Don’t over-burn yourself to earn a living. Instead, choose only hours that you can work comfortably.

• Crack the budgeting requirements

Lastly, check the budget and try to downsize on certain aspects. Identify how much you can save on rent, food, fuel, and education costs. For example- switch to a smaller rental apartment if you hardly use the entire portion. Alternatively, reduce the cable, subscriptions, and other costs.

Identify how much you must spend on necessities. Calculate the total costs and the useless expenses. Try to cancel the unused subscriptions. Lowering down on certain lifestyle aspects helps you save money. It is also about regulating your financial habits. 

Bottom line

Managing expenses as a student is challenging. Identify the aspects leading to debt build-up. Check what you can do to reduce the costs. Analyse aspects like income, total monthly savings, and expenses.

Try to eliminate the costs that do not contribute to lifestyle betterment. Using credit cards, spending more on wants, etc., could be useless, but working on such aspects will help you get out of financial trouble. Moreover, you can also consider setting up an emergency fund. It will help you counter the critical life phase.

Description: If you struggle to deal with financials as a student, the blog may help. It lists the best practices that may reduce your liabilities.