10 Ways of Getting Graduate Finances off to a Great Start

August 18, 2008

Get your graduate finances to a great startGraduating from university is a life changing event, especially in the UK. There are the parties, celebrations and well wishers; there are also the many changes that suddenly take place. The graduate in Great Britain no longer has a well defined daily routine and foreseeable expense; instead, suddenly there is the change from student to job hunter, and job hunter to career minded worker.

In many cases, the fresh baked graduate in England will be earning a living for the very first time. Unfortunately, some former students leave university and enter the workforce with a lot of student loan debt as well as credit card balances and even the occasional overdraft. There are 10 surefire ways of getting graduate finances off to a great start, and if you want to earn high marks in fiscal responsibility, you will do well to listen up.

1. Budget your monthly expenses. You are most likely now faced with expenses which differ from those you incurred while you were still living as a student. When you determine early on where you money will go, you will get a head start on putting a big dent in your outstanding debts and getting them paid off quickly.

2. Pay off your student loan debt last. Since the Government sponsored student loan deal offers the cheapest interest rates currently in existence, it is worthwhile to eliminate higher interest debts first. Additionally, repayment does not begin until you are bringing in £15,000. This leaves you most likely with your overdrafts and also credit card debts.

3. Plan your debt repayment. Knowing how much you owe and how much you can afford to put toward your debts is vital for a sound budget. Getting caught unawares with respect to outstanding bills and balances may lead to financial disaster. If you find that you have a hard time meeting all of your financial obligations, consider consolidating them onto a transfer card that offers 0% interest.

4. Initiate a savings plan. After your debt repayment is scheduled and you have found a way of incorporating aggressive debt reduction in your overall budget, it is time to also put some money away. Opting for an interest earning Cash ISA that also offers tax sheltering is a good idea. The sooner you begin saving, the more will accumulate over the lifetime of the account.

5. Open a graduate account that meets your needs. Even if you have already opened a student account previously, consider moving your business to a different banking provider. After all, what suited you well prior to graduation may not be exactly what you need a couple of years down the road. If you can show that you qualify for the account and your banking history with your initial student account is solid, there is no reason why you may not move your business.

6. Exercise fiscal savvy rather than falling for handouts. You may be offered teaser rates and freebies just for opening an account with one bank over another. Perhaps you are offered discounted CDs or mobile phone savings, but when these are used up, you are left with a graduate account that costs more money than you saved with the free offers.

7. Know your approved overdraft rate. If you must let your finances go in the red, you may do so at a cost. Some graduate account providers offer as little as 10% interest while others will charge as much as 18%. Interviewing different banks has an advantage in that you can compare rates before you may need to pay them.

8. Know your gratis overdraft limit. There are a couple of graduate account providers who permit you to operate in the red to the tune of £2,500 in the first year, £1,000 in the second and £500 in the third, without charging any interest.

9. Be aware of your unapproved overdraft cost. If your red turns redder and you go beyond the agreed upon terms for overdraft protection, you will incur interest charges at a different rate. These fees vary by provider, but may run to the tune of 14.8% all the way up to 29.8% plus an additional £30 per day. Avoid this kind of accounting mistake whenever possible but shop around for the most favorable terms before doing business with any bank.

10. Cast an eye toward property ownership. Learn about mortgages, chart the housing trends, and think twice before you sign up for a 100% mortgage product; it is usually too expensive in the long run.

The Smart Student Finance Guide

August 17, 2008

Smart Student Finance GuideLeaving home for the very first time brings more than just the long awaited freedom: there are now books to read and study papers to draft, classes to attend and schedules to keep. In addition, for the very first time the average student will come face to face with the bills that need to be paid for everyday commodities such as rent, electricity, and laundry. Students who may have looked forward to university, but might not have considered the intricacies of fiscal responsibility, will benefit greatly from the five steps that will help with becoming money smart quickly and easily.

1. Open a student bank account that meets all of your need at the minimum costs possible. You may want to favor one bank over another because of the freebies that are used as incentives for university students bringing their business there, but no CD or cinema ticket is worth the cost of an account that gradually eats away at the value of free items with fees and costs of doing business. On the other hand, some incentives – when coupled with advantageous student account terms – make for attractive and money saving offers.

2. Work on your budget. Know how much money you will receive on a monthly basis and then set up a list of all expenses. Your expenses cannot be more than your incoming funds, and it is important to make the budget and then follow it. Online budget planners are a good way of inputting schedules for paying your tuition fees and also rent and other expenses. This prevents any last minute surprises and will not catch you halfway through the month with no money left.

3. Find a job. Even as your primary job is getting a good university education, a secondary job that brings in money is oftentimes the only way to make ends meet. In addition to helping with defraying some of the costs you incur during your education, you are gain valuable work experience and references, which will come in very handy after graduation.

4. Open a savings account to help with the big ticket expenses. Payments on your student loan will come due thrice in a year, and having this much money in you main operating account might tempt you to buy things you really should not spend any money on. A secondary savings account will put the money out of harm’s way, let it earn some interest, and allow you to contribute to it at regular intervals. When the student fee payment comes due, you do not have to scramble but have your funds ready.

5. Save money in the right places. Second hand buying is synonymous with student living, and skimping in the right places can save you substantial sums of money. Books almost always can be had second hand, and the same is true for a bike and basic appliances. Always check for deals at the grocery store, and make use of group discounts at clubs and other venues.

The Best UK Student Accounts 2008-2009

August 16, 2008

Student credit cardsFinding the best student accounts available does not have to be difficult. Instead, using readily available information can quickly and easily show you what is available for you and what may also be of advantage. The terms with which you want to become familiar are the credit interest rate, the credit card limit, and also the interest free over draft fee on a per annum basis. There are also the overdraft fees for authorised and unauthorised overdrafts; terms which you must know even if you do not intend to avail yourself of these financial products.

For this comparison we will look at 17 different accounts available in th UK in 2008-2009:

1. The Abbey Student Account Package offers a 3.93% credit interest rate and a £350 credit card limit. In addition, you may enjoy a 9.9% authorised overdraft and a 28.7% unauthorised fee. If you keep the account and transfer it into a graduate account after your time at university, there will be a £50 cash incentive.

2. The Abbey International Student Account Package offers a 5.84% credit interest rate and the same credit card limit, but there are not overdrafts offered.

3. Student Accounts with the Bank of Ireland have a low 0.50% credit interest rate and a lower £250 credit card limit. The authorised overdraft is 0% while the unauthorised tops at 12.68%. If you transfer your account into a graduate account within two years of graduating from university, you are treated to a discount card for travel in Northern Ireland and also various discounts.

4. Barclays Student Account Package starts off with a 0.10% credit interest rate and a rather high £600 credit card limit. The authorised overdraft is 8.9% while there is no unauthorised one. You may turn it into a graduate account within two years of graduation. Enjoy the incentive of six free cinema tickets.

5. The Clydesdale Student Bank Account Package offers 2.90% credit interest and a £500 credit card limit. The authorised overdraft stands at 7.49% wile the unauthorised overdraft will cost a whopping 29.99%. Keep in mind that you have only six months after graduation to transfer your account into a graduate account.

6. A bit different from the rest is the Co-operative Bank student account which offers no credit interest rate and has a negotiable credit card limit. The authorised overdraft cost runs at 9.9% and the unauthorised stands at 15.9%. There is a 12 months cap to transfer your student account into a graduate account after your studies at university are finished.

7. The First Trust Bank offers no credit interest and a negotiable credit card limit, while also offering 0.0% for the authorised overdraft. The unauthorised overdraft runs at 9.0% and within two years of graduation you may transfer your student account to a graduate account.

8. A student account at HSBC begins with a 5.84% credit interest rate and a £500 credit card limit. Authorised overdrafts incur 3.0% charges while there is no unauthorised package available. You may transfer your student account to a graduate account.

9. The international version of the HSBC student account offers a 0.10% credit interest rate but no credit card of overdrafts. There are discounts available but the account may not be transferred into a graduate account.

10. A Halifax student account package carries a 2.00% credit interest rate and offers a negotiable credit card limit. Authorised overdrafts run 7.2% while unauthorised overdrafts cost 24.2%. Within 12 months of graduation you may transfer you student account into a graduate account. Incentives offered to you are discounts on AA breakdown and Cardcare cover.
11. Students banking with Lloyds TSB find a 0.10% credit interest rate, £500 credit card limit, 8.2% authorised overdraft cost, and an identical unauthorised overdraft expense. Transfer from student account to graduate account must occur by 30 September upon university graduation. A generous incentive package includes £20 just for opening the account and up to £80 for referring up to four friends to also open accounts.

12. The Islamic Lloyds TSB student account offers no services other than a year one £1,500 overdraft. Eligible for graduate account transfer, there is a £25 incentive and an additional £50 credit if there are no overdrafts posted to the account and three credits have been paid.

13. NatWest offers students accounts at 0.10% credit interest with a £500 credit card limit, and an unauthorised overdraft cost of 17.84%. You may transfer your student account into a graduate account. A five year rail card worth £120 makes for a most useful incentive.

14. The Royal Bank of Scotland student account package starts out with a 2.00% credit interest and a £500 credit card limit. There is an unauthorised overdraft at a staggering 29.84% and it is wise not to make use of it. Transfer the account within 12 months of graduation into a graduate account. To sweeten the deal, the bank offers a free webcam complete with online applications as a primary incentive. There are also shopping and entertainment discounts offered.

15. The Smile student account package has a 2.25% credit interest and a negotiable credit card limit. Authorised overdrafts cost 9.9% while unauthorised overdrafts run 15.9%. You may transfer the account to a graduate account within four years of opening it.

16. Ulster bank offers a 0.10% credit interest and negotiable credit card limit and authorised overdraft cost. The unauthorised overdraft fee is currently at 12.7%. Transfer your account to a graduate account within two years of graduating from university.

17. With a Yorkshire Bank student account package, you enjoy a 2.90% credit interest and a £500 credit card limit. Authorised overdrafts cost 7.49% while unauthorised overdrafts run up to 29.99%. You have up to six months after graduation to transfer the student account to a graduate account.

Best Graduate Accounts for 2007/2008

May 3, 2008

Royal Bank Of Scotland - Halifax

When it comes to graduate banking, Lloyds TSB and the Royal Bank of Scotland offer graduates a special interest-free overdraft for three years; and have great 0% overdraft limits. The interest free maximums are £2,000 in year one, £1,500 year two and £1,000 year three.

With Lloyds TSB’s graduate account the limits are guaranteed while RBS’ graduate limit is approved on a case-by-case basis. Yet to counter that, if you need to borrow over the limit, and its agreed RBS is cheaper at around 10% compared to Lloyds 16%; plus it also pays higher in-credit interest. Though if you do need more borrowing, in either case it is likely to be cheaper to get a special graduate loan.

As the difference between the is subtle, go for whats most convenient for you.

Do you have a Halifax or Bank of Scotland Student Account?
Although they don’t offer graduate accounts per say, most existing Halifax or Royal Bank Of Scotland student accounts holders can receive up to £2,750 interest free as part of their overdraft for the first year of graduation as an extension of their student account.

Therefore if you’re with either the Royal Bank of Scotland or Halifax, stick with them this year, then switch to the best graduate account the next. There is always a chance such good limits to switch to won’t be offered next year, but graduate account deals have been consistently improving with most banks.

Welcome to graduate finance

May 2, 2008

Graduation photo

Welcome to graduate finance, your guide to all things important to recent graduates.