A whole new generation of students are about to leave home and embark on the adventure that is student life. For some, it will be the first time that they have had to manage their own budgets. And for many, they are watching, with a degree of alarm, the doors of the Bank of Mum and Dad (BOMAD) sliding shut.
But as BOMAD shuts up shop, the High Street banks are bombarding students with rail cards, Amazon Prime membership and restaurant vouchers.
But for this generation of students, there’s also the whole new world of challenger, digital banks, with a complex array of enticements aimed at students.
Digital Banks Are Changing The Game
Jessica Murray, writing on the Save the Student website, reviews the functionality and deals of the leading challenger banks such a Monzo, Starling and Atom as well as the range of budgeting apps and savings bots for managing and monitoring expenditure. There’s kWh for keeping the lid on energy consumption, mySupermarket and CheckoutSmart for driving food shopping costs down and Onanvo Extend for reducing data costs. There’s even the musicMagpie app for generating cash by recycling and selling on games and old CDs and DVDs.
And for any student who has a niggle that they’re spending too much on coffee, diet Coke or beer, they can scare themselves silly with Martin Lewis’s Demotivator. Punch in your non-essential item of expenditure, the unit costs and how often you buy it and Martin’s demotivator calculates how much that adds up to each year and across a working life.
If it’s a caffeine habit you have for example, then the demotivator is quick to flag up that just one medium sized Americano from Costa on the way to lectures and a couple over the weekend will cost a student £803 a year and £36,135.00 over their lifetime.
Students are smart and, with budgets under pressure, they are highly motivated to use all the resources out there to keep their finances on track. And many students will have their smartphones loaded up with a range of apps to help them manage their budget.
Its good news that students are using the array of financial management apps at their disposal and bodes well for future financial responsibility.
Are Students Missing A Trick?
But I wonder if they know, as they download scores of cool apps onto their phones, that the millennials and their parents’ generation too, may be one step ahead of them?
You could say that Castlight Financial’s Affordability Passport is, in essence, a whole lot of these cool apps all rolled into one. The Affordability Passport uses the same open banking technology as the digital banks and some of the budgeting apps, but instead of totaling up the numbers in a defined area of spending such as utilities bills, the Affordability Passport is able to categorise transactional spending across multiple personal accounts, categorising spending into 155 categories and a further 29 categories for income.
The Affordability Passport is powered by Castlight’s CaaS (Categorisation as a Service) software which is currently the most powerful categorisation engine in the UK. And now that it’s being widely used by the UK’s High Street banks, there are hundreds of thousands of UK customers who should feel pretty smug that, whatever numbers their student children may be crunching with their budgeting apps, its not nearly as cool as 155 categories of spending analysis.