THE summer holiday money has been earned, the grant cheque is in the past and ideally, the part-time job has been lined up. Now all you have to do is stretch those three or four thousand pounds over the next nine months - nine long months that unfortunately include Christmas and Easter holidays.
The temptation may be enormous. but college money needs to be carefully earmarked for rent, utilities, food and drink books, transportation and entertainment. Miscellaneous has to be paid for too, which doesn't leave much leeway for tempting new jeans, the occasional CD or even Christmas presents for the family.
For many young people, going to college, and especially living away from home represents the first time that they have ever handled any `serious' money or budgeting. Many 18 and 19 year-olds have never had a proper bank account before and coping with what seems like a large amount of cash can be a real challenge.
Four of the main retail banks - AIB, Bank of Ireland, Ulster Bank and National Irish Bank have designed student accounts to accommodate just about any sum. In the case of AIB and Bank of Ireland, they have special branches at most of the universities and RTCs and along with Ulster and NIB have student officers in most larger branches. Lists are available from the banks. These student officers can arrange to open a savings/current account complete with standing orders for the payment of rent and utilities, arrange overdrafts and/or loans and can also assist in helping you set up a budget. This latter service can be especially useful for students sharing accommodation: the biggest source of friction (after noise levels) in a shared house is someone not paying their share of the electricity or the food bills.
Student loans tend to be subject to the same borrowing rates as other personal loans, ranging from about APR 10.5 per cent to APR 11.5 per cent, though Ulster Bank does offer reduced rate travel loans for students working abroad during the summer. (It will also help you plan the financial aspects of your trip, like foreign exchange and how to get money transferred, etc.) Loans are generally given out on condition that two thirds of the amount is paid back at the end of the college term and the balance by the end of the summer. Parental guarantees are necessary for loans and overdrafts.
Overdrafts are available from the four banks, sometimes only until grant cheques are paid, but only Ulster Bank offers free overdrafts on sums up to £300. Others may offer discounted overdrafts such as the APR 8.25 per cent from National Irish Bank but students should keep in mind that at time of writing rates were on their way up, if only by a quarter of a percentage point.
Lending is only one side of the student account packages. Free banking is also a big plus - i.e. no charges for cheque or ATM transactions, standing orders or direct debits and no standard quarterly statement charges. Interest is also paid on credit balances. In the case of Bank of Ireland this amounts to up to 1.75 per cent on balances over £500. But even tiny balances (from £1 to £250) will earn 1.25 per cent. This might only amount to pennies saved over a year, but every penny is important in the long term. Students also enjoy commission-free foreign exchange.
The student account always comes with an ATM card. For students who prefer to avoid the temptation of having a chequebook, the ATM is an absolute must and the main banks can arrange for dual ATM accounts to be held by parents and student which allows for the former to keep the latter account in the black.
The new 24-hour banking services at AIB and Bank of Ireland mean that the account can be accessed at any time of the day or year by telephone, including the transfer of cash from one account to the other. Ulster Bank also provides mini-statements from its `Servietill' which show the last eight transactions, while National Irish Bank ATM cards also let you withdraw cash from not just all the other Irish banks but from Northern Bank, Clydesdale Bank and Midland Bank ATM's anywhere in Britain.
Student bank accounts also come with freebies. These range from the sublime - £300 worth of shopping vouchers when you open an Ulster Bank Dual Account, to the plasticy ATM wallets all the banks give out. Rather more valuable free gifts include AIB's offer of £5 towards college registration fees and £7 towards a USIT card.
Farsighted as this may seem to the average 18 or 20 year-old, the most important thing about the student account, and regardless of which bank is chosen, is that it will most likely present the young person with their first opportunity to establish a relationship with a bank and a bank manager.
If a student can avoid abusing that relationship for the next four years they will find themselves in a much stronger position - after graduation - when they want to borrow some money for a car or a holiday or a house," one bank manager said last week. "Plenty of good, lifelong customer/bank relationships start during college," he adds.
