If you're just bumbling along with any old bank account – stop. This 5-minute read is all you need to save more, earn more, and beat the banks at their own game.
1. Lazy doesn't pay
When it comes to banking, the only aim of the game is being better off. If there's a bank account out there that pays out more or works harder to keep your budget in check, there's no point sticking with a poorer deal.
This is especially true of student accounts, which come loaded with tempting offers. These offers can and do change – as will how you use your account. So, you might want to grab the best student bank account for freebies in the first year, then switch to the bank with the biggest overdraft in year two. The 'Current Account Switch Guarantee' makes switching safe, quick and hassle-free, so make the most of it!
2. You need a bit on the side
While you can only have one student account at a time, a second account is a budgeting secret weapon.
You use your main account to pay in Student Finance, wages and any other income, and to pay out regular or important costs (like rent or bills). You then transfer a monthly or weekly allowance to a second account, and only use that for everyday spending.
If you've ever breezed through your Student Loan by reading week, splitting up your cash like this is a good fail-safe option.
3. Don't turn down a free overdraft
Many current accounts let you spend slightly more than you have in your balance. The bank turns a profit by charging fees or interest until you pay back what you've borrowed – and these can be pricey.
With an agreed 0% student overdraft, however, you can dip into this buffer without the costs. Even if you accidentally overspend (or need emergency funds), it's a free safety net.
If you reckon you'll never have to spend your overdraft, you could even withdraw some of it and stick it in an easy access savings account to make money from interest instead.
Overdrafts are a form of borrowing, but that doesn't make them scary. Spend them wisely, stick to the terms and plan to pay it back before the interest-free period ends.
4. Virtual banks are top for budgeting
Online banks don't do everything high-street student accounts do – no 0% overdraft, for instance – but for an everyday spending account, they're the place to go.
These digital accounts are often entirely managed by smartphone, and offer a mix of real-time balance alerts, budget tracking, free overseas spending, virtual/disposable cards and auto-saving (more about that below).
Many offer a pre-paid Mastercard: This works like any debit card, except that you have to top it up with cash to use it, just like a PAYG sim. If you're hopeless at budgeting, this is a killer way of reining in your spending.
5. Get a bot to save for you
Finding spare cash to save on a student budget is a tough order. That's where bank bots come in.
One way to use them is to turn on the 'save the change' option for your account. Every time you pay with a debit card, the amount is rounded up to the nearest pound, with the leftover pennies put in a savings vault until you need it.
Alternatively, some accounts or apps monitor how much you spend each month and then slide what you can afford to save into a separate pot.
Either way, it takes almost no effort to build up a savings pile – and, because it involves pennies at a time, you won't feel like you're missing out. If your account doesn't yet do auto-saving have a look at Plum, Cleo, Chip, or the virtual banks listed above.
There's a lot more to banking than grabbing the first account that comes your way. The latest batch of bots, apps and budgeting hacks make it easy to stay on top of, or grow, your money. And, once you combine tactics, you're onto a beautiful thing.
Guest blog written by Ruth Bushi, an editor at Save the Student – the UK's largest student money advice site.