Katrina Gaffney, External Affairs Intern, Money and Mental Health

How can we help students avoid financial difficulty?

20 September 2019

It’s that time of year again – the time when thousands of fresh, young faces, free of parental constraints, head off for their first year at university. Undoubtedly, this is an exciting moment for lots of people (students and parents alike!), but it is not always without issue. For many young people going to university, this will be the first time they have to manage their own money and this can bring its own set of challenges. The prospect of having to handle your own finances can be anxiety-inducing for students, but it doesn’t need to be. 

Taking responsibility for your own finances is a big transition and it can give young people a unique sense of autonomy. It is important that students (especially those experiencing mental health problems) are given support to manage their money in a way which preserves their new-found independence. Money and Mental Health has come up with lots of ideas for ways in which banks and other financial firms make money management less stressful, particularly for people with mental health problems which can make staying on top of finances even harder. In this blog I wanted to explore some of the ways in which these ideas could be specifically helpful for students. 

Money Management Tools

A number of our reports, including Fintech for good, have considered how digital money management tools can help people to keep track of their spending and make financial decisions. Here are a couple of features in particular which might be useful for students:

  1. Visualisation: For many students, having to budget their own money will be a completely new experience. Allowing students to see visual breakdowns of their spending – such as charts or graphs – could make this process easier and help people to engage with their finances, for example by making them more aware of how they are spending their money.
  2. Tools to help construct a budget: Even if we have a clear idea of where our money is currently going – and where we’re falling short – it can still be difficult to use this information to plan ahead and budget accordingly. A tool that can provide support with this could help students to make a budget which suits their needs.
  3. Jam-jarring: Imagine being 18 years old and having a couple of thousand pounds deposited into your account! The way in which student finance works, with three large payments at the beginning of each term, means there are times when students suddenly have access to a lot of cash, and this can lead to problems. The ability to ring fence pots of money could be really helpful, especially for those who might struggle with impulse control or over-spending.

A little extra help

Even with these money management tools, some students experiencing mental health problems might want a little extra help with managing their finances from a family member or friend. In our report, A little help from my friends, we called on banks to make it easier for people to share financial decisions with loved ones, in a way that could help them avoid financial difficulties, while also preserving their autonomy. One feature which might be particularly useful for students would be giving them the option to have a text sent to a third-party if there had been unusual activity on their account (for example, if they had spent over a certain amount of money in one day). This would allow students to retain control over their spending, whilst also providing the reassurance that a trusted family member or friend would be alerted if things started to go wrong. 

Spotting a problem early

For students who are not used to managing their own money, it might be hard for them to recognise if they’re starting to head for financial difficulty. Could financial data provide an unexpected solution to this issue? This is something we will be exploring in our upcoming report, which looks at whether banks could potentially analyse the data they already hold on customers to look for early indicators that someone may be struggling with their finances, and proactively offer help. We’ll be publishing this report next month – to be one of the first people to hear about the findings of our new report, make sure you follow us on social media or sign up to our mailing list.

This blog is based on my personal thoughts about features which I would have found useful as a student. If you are a student who has experience of mental health problems, you can share your own thoughts with us by signing up to our Research Community