23 June 2015

Just finished uni?  It's time to make a plan

So university has finally come to an end. For many new graduates, it’s their first step outside full-time education, which has been a part of daily life since that first day at primary school. 

Like all major life changes, the end of university brings with it a mix of feelings – excitement, inspiration and a sense of freedom on one hand. But on the other, confusion, doubts about the future and even periods of sadness and depression as you begin to adjust to the change.

All transitions involve some measure of the unknown (even if you are moving back into Mum and Dad’s spare bedroom… initially). But there are plenty of things within your control, too. Practical steps like planning your future finances can make you feel more in charge and set you up for the first steps into your new life. And there’s plenty to look forward to as you enter the world of work – yes, you’ll have less time to spend on Buzzfeed, but there’s the enticing prospect of having more money at your disposal, and being able to save towards your future.

Here are a few ideas you may want to include in your post-uni action plan …

Look at your current account

Your current account provider may automatically switch your student account to a graduate account after you leave university, but you can always change provider if you find you can get a better deal elsewhere. 

New graduates are an attractive prospect for banks and building societies because of their new potential earning power, so there are plenty of options available to you. Make sure you look around at what’s on offer, taking into account any freebies, introductory offers and special rates for graduates. Don’t overlook ‘regular’ current accounts either – many of these offer attractive rates and packaged extras like travel insurance. 

Online banking and mobile banking are tools many people find helpful for managing their money day to day. So you may want to check what digital banking options are available from different providers, and see how many positive reviews their apps and online banking services have received.

Make (or update) your monthly budget

Your spending habits will change considerably now you’re no longer a student, especially if you’ve started work. So although it’s not the most exciting leisure activity, you may want to set aside some of your free time to draw up a new budget

Work out what your outgoings will be, such as rent, travel costs, utility bills, council tax and work clothes to see how much you will have left over at the end of the month. That’s your disposable income. And while it may be tempting to blow it on short-term spending, you can give yourself a bit of financial security by using it to build up an emergency fund that will get you by for at least three months.

Once you have a basic savings cushion, you can use any disposable income to start paying off any overdrafts, credit cards and store card debt you may have built up during your studies. These will usually have high interest rates. If you still use a credit card, make sure you pay it off at the end of each month to avoid being charged interest.

Start to think about saving

If you’re going to be working full time after college or university, it can be tempting to plan a spending spree with all the extra money you’ll be getting. But this is a good time in your life to save as your outgoings should be relatively low. If you want to get on the housing ladder, or buy a car to make travelling easier, set yourself savings goals and try to put aside some money each month.

A popular way to save is by opening an ISA. The great thing about ISAs is that you don’t have to pay any tax on the interest they earn as you would do with other savings accounts. Even if you can only manage to put away a small amount each month, you’ll be on the way to building up savings for your future. 

Budget for student loan repayments

Once your salary hits a certain threshold, your student loan repayments will kick in. How much you’ll pay back and when you’ll begin depends on where you’re from and where you studied. It might seem a long way off now, but it’s worth finding out your student loan repayment situation in advance. That way you won’t get a surprise when your take-home pay suddenly changes. 

The earliest you will have to start paying off your loan is from April 6 the year after graduation, and that’s only if your salary is high enough to hit the repayment threshold. You can find out more about repayments at the Student Loans website.

If you’re concerned about debt generally, help is available. To find out more and see who to contact for advice, read our guide to managing debts.

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