Smart ways to make the money last as a recent graduate

In the UK, the average graduate has £50,000 in student loan debt. As the national student loan total approaches the trillion pound mark and authorities turn their attention to the impact on the national economy, the question is no longer who has student debt - but how much.

As a recent graduate and someone just settling into your first job and kick-starting your career, repaying your student loans and balancing it with new financial commitments such as rent, car payments and other living expenses can be a tricky thing to navigate. Particularly on a graduate salary and before you are in a position where you can negotiate a pay rise.

This is where adopting a prudent and tactical approach to spending helps. Simple changes in your everyday habits can add up and help you stay on top of your repayments, while still having money left for the fun stuff.

Ditch the credit cards

Credit cards are notorious for being high-cost debt. In 2018, the average APR for credit cards hit 23% and it is now the norm for university students to have access to them. In fact, banks and financial institutions offer a wide range of student credit cards, specifically aimed at students who tend to have little or no credit history.

Using the household credit card average of £2,631, this means you can be paying approximately £603 in interest charges annually. However, the sooner you can get rid of the higher interest debt, the more progress you will make in the debt repayment journey. Higher interest rates means more of your monthly payments are going towards servicing the debt and not repaying the initial principle.

When you are no longer spending money on high-interest charges, the hundreds of pounds saved can then go towards paying down other debt or establishing a safety net to reduce your reliance on debt.

Back to cash

Everything is moving towards being digitalised, including our spending. Card payments have overtaken cash as the most popular form of payment in the UK and contactless, mobile and e-wallets are on the rise. While these payment methods are fantastic for convenience, they can also make us loose sight and control of our spending.

It is no secret that budgeting needs to be in the mix if you want to take control of your finances. Once you have worked out a monthly budget, opt for a cash envelope system. Assign a set affordable amount to each category including groceries, travel, dining out and miscellaneous. Dealing with tangible cash helps us registering when and what we are spending in a different way. As you see your allocated amount dwindle throughout the month, you are more likely to make more conscious decisions.

A great tip is to incorporate a preset amount for student debt repayment into your budget and leave it in there until the payment date. Withdraw cash for the other categories (except for bills that may be direct debit) and use this as your spending allowance throughout the month.

Install a budgeting app

Given today’s digital climate and the fact that Britons spend up to 24 hours per week online, going digital to monitor your finances makes sense. Knowing where your money goes and accounting for both incomings and outgoings gives you an overview of your financial habits, black on white. By keeping track of your spending in an app it will be more difficult to ignore unnecessary spending and errors in judgement when it comes to your money.

Budgeting and financial tracking apps can often sync with your bank accounts, savings or even pending expenses, which makes things quick an easy for you. This gives you a chance to see the bigger financial picture and a better chance to identify where you can make cuts. It can start from spotting that daily £3 coffee habit or Friday night takeaway. Take an honest look at your life and be willing to make a few sacrifices - at least for the foreseeable future.

There are many apps to choose from; Mint is one of the best-known budgeting apps and PocketGuard is an incredibly user friendly version.

Get a side gig

Finally; look into how you can earn some additional money on the side! Temporary work is extremely flexible and you are in full control over your availability to work. Why not register as a Temp and get work experience with some of the biggest brands in fashion? You'll earn up to £9 per hour and get paid weekly.

Other ways to make some extra money:

  • Sign up with market research, mystery shopper or mystery diner companies that offer compensation
  • Make use of free or minimal cost online marketplaces and car boot sales. Re-sell finds from charity shops or sell anything that you no longer use in your own wardrobe

Are you a recent graduate and unsure how to kick-start your fashion career? Read this article for our top advice.