Ten ways to make the most of your cash Education 2001

1. BILLS: Switch to the cheapest gas and electricity supplier in a student house to save more than 100 a year. Costs depend on location and use. To find your cheapest supplier, plug your details into free comparison services www.uswitch.co.uk (or call 0845 601 2856) or www.buy.co.uk.

Watch out though, contrary to the marketing, dual fuel (getting gas and electricity from the same supplier) is usually more expensive than using the cheapest separate suppliers.

2. HOME PHONE: The Talk Box plugs into your BT line and routes individual calls through the cheapest of 15 operators depending on time and destination.

It costs 24.98 but this is soon offset by substantial call-cost savings.

www.talksense.co.uk or 0800 107 0139 3. SAVINGS: If you have surplus cash (see tip no 10), ensure it works for you. The obvious risk-free choice is a savings account, or alternatively stow up to 3,000 in a mini-cash ISA.

Essentially it's a savings account the Government allows you to have without paying tax on the interest. Though it's likely you won't be paying tax anyway, the best cash ISA pays more than the best savings account. You can find that ISA at internet-only bank www.smile.co.uk, paying 5.75 per cent with instant access to your cash on any amount from 1 up.

4. CREDIT CARDS: Student plastic normally charges around 18 per cent interest. Ultra cheap special credit rates aren't usually available to students due to a lack of income and limited credit history. If you're working full time or finishing a year out, take urgent action and apply before leaving your work to start university, so you can state your current income to stand a better chance. Try Capital One (0800 952 5156) at 0 per cent for six months and RBS Advanta (0800 077770) at 1.9 per cent until February 2002.

5. HOUSEHOLD INSURANCE: Add up the cost of replacing your possessions if they are stolen - CDs, TV, clothes etc - and you'll be surprised at the cost.

Insurance is useful, but many students buy it unnecessarily as their parents' homecontents policy has "away from home" cover, which includes their possessions in student digs. Check the terms and conditions. Insurers' charges differ depending on your postcode and whether you're in halls. If you need to buy a policy get quotes from a range of student specialists - Campus, Endsleigh or Saxon Insurance.

6. TAX: Students' earnings are taxed like anyone else's, which mean the first 4,535 of income a year is tax-free. However, tax is automatically deducted from pay cheques, potentially leaving you short of cash. To stop this, if you get some work tell your employer if it's unlikely you'll earn enough to pay tax this year and ask to fill in a P38(S) form. Similarly, if your bank interest is being taxed, ask for an IR85 form to fill out.

7. HEALTH: Fulltime students under 19 are entitled to free prescription charges, NHS dental treatment, sight tests and help with the cost of glasses.

For other students it depends on income, though most will get some or full help with charges. This can be worth around 400, so it's worth applying with an HC1 form from the treatment centre. Once you're working you'll pay big bucks for these treatments, so it's well worth getting all cosmetic dental treatments sorted while you're a student.

8. BANKING: Maximise the interest-free overdraft you get. Lloyds TSB gives the most, 1,500 a year for the first three years, then 2,000 if you're there for a fourth or fifth year. Though the amount of interest you will earn in credit may attract you, follow tip number 10 and you'll see it's irrelevant.

9. MOBILES: Stopping your mobile ringing up cash doesn't mean switching off its tintoned rendition of Abba's Money Money Money. Orange or One2One users can use override numbers to bypass the networks and just pay landline call costs. You call a freephone number on your mobile to access the service, then dial as normal. This number's changed roughly every 10 weeks, when the networks get savvy to the ploy. It is legal, but check it doesn't breach your contract. One-Tel (0800 957 0020, www.onetel.co.uk), for example, charges 2.5p at all times to any UK landline roughly 80 per cent cheaper than the networks.

10. DEFICIT BANKING: The basic premise of this budgeting trick is keeping as big a negative balance as possible within your interestfree overdraft limit by putting most of your money in a savings account or cash ISA.

This means you'll be earning interest on money the bank's lending you free. By the same rationale, take out the maximum student loan as well, as it's at just 2.6 per cent interest, and save it in Smile's cash ISA earning 5.75 per cent. To illustrate, put away the maximum student loan for three years without touching it and you'll make more than 1,000.

I wish I'd known how much everything would cost

Annie Taylor, 21, is about to begin the third year of her psychology degree at Southampton

"Although I am really enjoying university, I wish I'd known how far my money would have to stretch. My friends and I have about 1,000 a term to spend, but we hadn't been in the real world long enough to know what it would cover.

It goes quite fast with books, fees, rent and food to pay for. You need to budget really well and think very realistically about your priorities, especially if a job would interfere with your studies."

Copyright 2001
Provided by ProQuest Information and Learning Company. All rights Reserved.