Embarking on life at university is a big step. It’s an exciting time but can be daunting and stressful too. After all, you’ve likely moved away from home for the first time. Welcome to the world of grown-ups! You now have to stand on your own two feet, and an important part of this is managing your money.
It might surprise you to learn that keeping fit can help you take control of your finances. In this article, Quizplus looks at the role of fitness goals in motivating financial growth and personal development. You’ll also learn about common financial mistakes students make, so you can guard against them, and what to do if you find yourself with bad credit.
How Fitness Goals Can Make Your Wallet Fatter
Fitness can lead to financial benefits as well as health gains. A byproduct of staying in good physical shape is smarter decision-making. You make better choices because exercise improves concentration and motivation, and reduces stress.
Setting and achieving fitness goals while at uni helps you realize the importance of motivation, a key life-management tool. This can help you stay motivated when it comes to managing your money. When you make better decisions about money and credit management, it can unlock your financial potential. The end result: financial growth and a better quality of life.
There’s are further benefits to be gained by being motivated during your time at university. Attending lectures when you have more energy and focus can result in better degrees and greater opportunities in your future career. When you continue your exercise routine after you graduate, you could get more job satisfaction as well as financial advantages. Research has shown that people who exercise regularly earn more money and are more productive in the workplace, with fewer sick days.
Common Financial Mistakes Students Make
University can be a stimulating source of self-discovery and personal growth. But it’s also the place where some students develop bad money-management habits – a problem that can continue in later life. When you go to university, it might well be the first time you have to deal independently with the financial aspects of life, and this can be bewildering at first.
Even with your government student loan covering tuition fees and living costs such as accommodation, other bills still have to be managed. Looking ahead, you need to bear in mind you’ll be paying off your student loan for 40 years. According to the government, the average student debt in 2023 is £45,600.
Financial mistakes that are common among students include:
Failing to have a basic budget.
Without a record of how much money you have and how much you’re spending, your finances can easily get out of control. With a basic budget in place, you can compare your income against outgoings. You may, for instance, need to reign in your spending to some extent in order to stick to your budget. This will also help avoid debt problems.
Failing to make a financial plan for the future
While you’re busy sitting through lectures, doing coursework, and studying for exams, planning your financial future may be the furthest thing from your mind. However, you need to think about ways to transition smoothly from graduation to your first job. Consider life goals such as buying a home and starting a family. You don’t need all the answers right now, but a financial road map is a good starting point
Credit card overuse
Credit cards make it easy to overspend, particularly if you rely on your card for meeting a lot of day-to-day expenses. Then there’s the temptation to make impulse purchases. The resulting mounting credit card debt can cause serious money worries. It can also lower your credit score, with many negative consequences.
Student Bad Credit
The greater financial independence you have when go to university may result in increased debt through heavy use of a credit card or overdraft. Overstretching lines of credit often leads to late repayments or missing payments altogether, and this can damage your credit score.
Your credit rating is based on your credit history. In the UK, credit history is compiled by credit reference agencies (CRAs), who each hold a credit report on you. Lenders check credit scores when considering loan applications.
Bad credit indicated by a poor credit score limits your ability to borrow money in the future because you’re seen as too great a risk. If you do manage to get finance, you may have to pay a higher interest rate.
However, bad credit can be repaired. This won’t happen overnight, though. Rebuilding bad credit requires commitment and perseverance. The motivation capabilities you developed through your fitness goals will be a big help with this.
Steps in rebuilding your credit include:
- Limiting unnecessary expenses and use of credit.
- Paying future bills on time.
- Making sure you’re on the electoral register, which helps verify your identity.
- Checking your credit report for errors and ensuring they’re rectified.
Bad-Credit Loans
Money is often tight for university students and unexpected expenses may crop up. This can result in the need for a further cash injection with a personal loan in addition to your finance from the government-backed Student Loans Company. The SLC doesn’t take your credit history into account but many personal-finance providers do.
Students in general may be considered high-risk borrowers. Getting a personal loan as a student can be even more difficult if you have a limited credit history or bad credit. But it’s not impossible. You will, however, need to show that although you may have had previous financial issues, you’ve got things back on track and can meet repayment requirements.
Some lenders specialize in bad-credit loans. Taking out any new loan may lower your credit rating temporarily because you’ve acquired more debt. However, making repayments on time and in full will improve your credit score in the long term and help your efforts in rebuilding bad credit.
Laying the Foundation for a Better Financial Future
The motivational drive acquired in keeping fit enhances your ability to make astute decisions in general and with money management in particular. This in turn can inspire personal financial growth as you manage your money in order to achieve your life goals with a healthier financial future post-university.
