Students start their degrees intending to budget carefully but become debt blind by their final year. New research reveals how quickly good intentions fizzle out once students get a taste for drinking and going out.
By the third year, most students had abandoned their budgets and were unable to identify exactly how much money they owe, according to the research, conducted by Lancaster University management school. Students did not treat loans or overdrafts as real debt but as a long-term investment.
Study author Sue Eccles said the research, tracking a sample of students aged 17 to 21, had identified a "worrying shift in behaviours" since none of the respondents showed undue concern about how debts of thousands of pounds could affect their lifestyle and future choices. Instead, they accepted extensive debt as an inevitable part of their experiences.
"Young people start with the very best of intentions - they recognise that being a student means budgeting in a new way and will not necessarily be easy," Dr Eccles said. "But drinking and socialising are crucially important and this is where their good intentions and financial planning are likely to be overtaken by the experience of having fun at any expense."
Although students claimed to make few unplanned purchases when they were out socialising, in fact they were likely to spend more than they had intended. Some commented on the ease with which many clubs and pubs provided a cash-back facility when debit cards were used to pay for drinks.
Among full-time students, Dr Eccles found budgeting consisted of two categories: fixed and "other".
"While they may have had a mental budget set in the past, because of their limited and sporadic income, any realistic budgeting attempts quickly disappear once they are in debt and once they have established access to credit or loans," she said.
"They have a sense of needing a certain amount of money each week for necessities such as food and travel, but are prepared to go without meals or get a lift if it means that they can afford to go out to clubs and pubs."
Rupa Huq, lecturer in leisure management at Manchester University and an expert on students and youth culture, said the findings echoed her own research in identifying the lifestyle that students "bought into" when embarking on a degree.
Dr Huq, who is studying non-traditional student lifestyles, said students provided a lucrative market that was targeted quite cynically by various commercial interests, from the freshers fair right through to the milk round.
"Many students feel the debt they build up is a price worth paying for their university experience, and while it is true that many strive to conform to the hard drinking stereotype, it is important we recognise the diversity that undoubtedly exists," she said.
Most students regard debt as a way of life
David Low, 18, is a first-year law student at Leeds University who is looking for a part-time job to prevent debts building up.
"Having a spending free rein for the first time meant I spent a lot in the first term and I am now realising what I have to last the rest of the year. The amount of money I'm getting through has surprised me. I have tried to keep a record of what I'm spending and keep to a budget but it's difficult.
"Sometimes I'll go out every night and other weeks hardly at all. A night out costs between £30 and £40 for a few pubs and a nightclub.
It's the other things that you don't account for, though, like the laundrette bill."
Vikki Burdess, 20, is a third-year performance management student at Leeds who has accumulated bank and credit-card debts.
"Most students regard debt as a way of life and probably think of it as an investment for the future. I have gone without meals so I can have a night out.
"Student nights out typically start in the union before heading into town for bars and a club. It adds up, and some freshers go completely mad. It would help if schools taught financial management so students didn't have to learn the hard way."