Lack of graduate jobs means keeping student debts under control is vital 6 July 2010
Steven Jackson (about the author)

Keeping student debt to a minimum while studying has become even more important as graduate jobs become more and more difficult to find. We investigate how you can give yourself the best possible start after leaving university with some simple money management tips.

It has never been more difficult to find a well paid graduate job. According to the Association of Graduate Recruiters (AGR), employers are currently receiving sixty nine applications per vacancy.

This is an increase from forty nine for every job in 2009 and thirty five in 2000.

The lack of positions has been caused by the economic downturn. And with the prediction of unemployment continuing to rise for the next five years, the future does not look bright for those currently in higher education or even those planning to start a university course in the next couple of years.

Keep one eye on your financial future

The fact is that getting into some debt while studying is virtually unavoidable particularly as the majority of students have to support their own living costs often for the first time.

However, on arriving at university, many people have a tendency towards a “live life for the now and worry about the consequences sometime down the line” attitude.

For this reason, it is now assumed by the National Union of Students that the average graduate will owe around £20,000 by the time they leave university.

In the past, students have looked forward to the prospect of getting a well paid job and therefore this attitude has not been so much of an issue.

However, in today’s market, getting any kind of job after graduation is by no means certain. Many graduates will face long periods of unemployment or lower paid work. Students today therefore need to take a much more mature attitude towards getting into debt.

Living within a budget

When you are at university, the way to avoid getting into unnecessary debt is to understand your budget and stick to it.

At the beginning of each term, you should consider the income you receive from student loans and other sources and divide that between the number of weeks in the term.

This weekly budget should then be split on paper giving you a spending plan for each of the main areas of your expenditure – accommodation, food, travel, university expenses (such as books) and of course entertainment.

Once you have calculated your budget in these areas you need to try and stick to it.

If you need additional funds, before asking your bank for a loan or credit card, look to see if you can get a part time job. Try to avoid borrowing more unless it is absolutely necessary.

No easy solution

Of course, living within a tight budget is easier said than done. However the first step is to actually calculate and write down a financial spending plan.

Taking this first step will at least help you understand what you can afford to spend and give you the chance to live within your means.

Borrowing more should be avoided if at all possible. It is all too easy to borrow a little bit here and there but before you know it, a student overdraft can run up to £2000 and a credit card balance creep up to £3000 or more.

Having to face paying off this kind of debt on top of your student loans when you graduate is not going to be easy particularly if you are unable to find a well paid job.

With this in mind avoiding unnecessary debt during your time as a student will pay you handsomely and give you a real head start after graduation.

If you are struggling with debt, visit www.beatmydebt.com

Our vibrant forum gives free access to industry experts and others who have suffered with debt problems.

Useful guides, calculators and information are also available designed to help you understand how to manage and resolve debt problems.