We caught up with Sarah who found out about this problem the hard way. Instead of spending money she didn’t have, she ended up having to take on much more than she needed to so that she didn’t feel like she was missing out on time with her friends and family.
At the top of a slippery slope.
Being a student and having close friends with wealthy parents became a problem for me when it came to my social life. I’m from a lower income family and had absolutely no help from my parents when I left for university, so I had to be really careful with my money because if I ran out, that was it.
I found the weekends particularly hard when I was at university. I had to go out to my part-time, minimum wage job, but my friends didn’t have to work because their parents paid for everything for them. They didn’t understand my situation and often told me to just quit and get my parents to pay my next month’s rent. It was very frustrating!
According to savethestudent.org, 78% of students worry about making ends meet and feel stressed about affording to do the basics like eat and drink, never mind any extravagant trips.
Spending above my means.
When it came to social events like birthdays or celebrating handing in an assignment, they were always quick to suggest something extravagant – which often involved having to pay for travel up to London (or even further), accommodation, pricey meals and drinks for the whole weekend. Not to mention outfits and gifts too. It all adds up.
I was having to bite my tongue a lot because I felt embarrassed about not wanting to spend the money to have a good time, but on the other hand I didn’t want them to feel like they had to settle for something they didn’t want to do just because of me and the fact I had less money than them – which they still couldn’t get their heads around. And this is just on the weekends, the same went for booking group holidays which they thought were necessary multiple times a year!
All work, no play.
I didn’t want to miss out on the experiences my friends were having so what did I do? Work, work, work! With paying rent on my own for a year, car costs and the need to save money for my final year of university I knew I wasn’t going to be able to manage it all unless I had significantly more money coming in. Whilst working full-time in a year out of study I got a part-time job in the office cleaning every weekday after work. I even signed up to temping agencies for casual work and worked weekends whenever I could.
I told myself I would drop one of the jobs when I had saved up a certain amount, but things like hefty MOT bills, a run of birthdays each month and finding out I’d be receiving less than half the normal amount of student finance in my final year meant that I was always in the same position of wondering how I was going to cope. When I had spare annual leave and didn’t have anywhere to go, I’d just work.
When there weren’t enough hours in the day.
When it came to having to spend money, I also took out a credit card with a 0% introductory rate to help me. I was able to increase the limit every few months as I proved that I could pay it back, and I dipped into my student overdraft when I needed to when I had to make big payments over the year. To supplement this, I also started selling clothes on eBay, but this was such a hassle when it came to having to package up and post them, especially when I was struggling to find time to myself anyway.
Time for confessions and coming clean.
Convinced my parents would tell me to quit something and just cope with what I had, it took me about six months to tell my family and friends that I had all these extra jobs. I still felt embarrassed about not having the money in the first place and also the fact that I was putting myself through gruelling hours for the sake of paying for things that weren’t essential.
By the time I got to the weekend, if I wasn’t booked to work, I would just lay in bed catching up on sleep. I was seriously burning out, but refused to quit. It’s a time in my life that I don’t want to repeat, so I’m always careful with money now and I’ve learned to say no.
Coping with different financial situations.
If your friends are seen to have a different set of financial circumstances than you then it can feel terrible. The simplest way to deal with it is to sometimes just say no. If you can’t afford something then prioritise. Don’t worry about missing out on a midweek trip to the pub if you know that you’ll see those friends at the weekend for something that you’ve got planned. Pre-empting the future will help you to talk to your friends about when you can do things, rather than you lying to them and yourself about being able to afford everything – there's no shame in it. Offer alternatives like nights in with films and snacks rather than a big night out, or even set up your own Come Dine with Me with your friendship group!
But what else can you do to boost your income when you need extra cash?1. Selling unwanted items.
Supplementing your income in a way that doesn’t compromise your quality of life can be a big help. Like Sarah, making use of eBay can bring in spare money. If you’ve gone through your clothes, try things in the house that you don’t need (this is a great way to banish clutter too!). Once that’s exhausted you could try things like buying bundles of clothes on eBay, then separating them and selling them individually, or scour charity shops for hidden gems – just remember to add postage on too.
Finding a 0% credit card to use in emergencies is also fine, if you know you can pay it back on time, otherwise you could end up spiralling into debt. Make sure you know how a credit card works before you look at this option as when they’re used properly, they can also help you to boost your credit rating - and you’ll need this for future finance like a mortgage.
3. Review your monthly budget.
Maybe you’ve got subscriptions to several different streaming services? Or you’re paying for things that aren’t essential? Going through your monthly bank statements and getting an overview of your spending will help you to cut out things that you don’t need. Prioritise what you’d rather be doing and if that means cancelling something so you have extra cash to go towards weekend socialising with friends then that’s fine.
4. Make your bank account work for you.
In Sarah’s case a student bank account was great as it allowed her to access extra funds that she could then replace. However, if you’re not able to benefit from an interest-free overdraft then make sure you’re using an account that could help provide benefits such as phone or travel insurance so you don’t need to pay for them separately. You can also get incentives to switch accounts, which often includes a reward in the form of free cash.
The main thing to remember is that a problem shared is a problem halved. Talk to your friends and family if you’re worried about it, as they might be able to relieve some of the pressure if they understand your situation a bit more.
Mark joined Choose Wisely in 2015. He continues to work in close contact with the providers, brokers and journalists operating in the world of consumer credit.