Summertime: the sun is high and the bank balance is low; sandals are loose and purse strings are tight. The best weather of the year coincides with storm and stress for a student’s finances.

The summer term can come as a bit of a shock to the unwary student. The term tends to be shorter than the others, so you get less in the way of student loan – and you don’t get anything to tide you over the holidays. 

If you are going to keep afloat financially you are going to have to take drastic measures, which might involve work! Here are some tips and tricks to get you through.

Don’t pay tax

One of the most obvious ways to make ends meet is to get a job. Unlike term-time jobs, when you have to have tax deducted from your earnings if you earn over a certain amount, if you have a holiday job, and you are not going to earn as much as the £5,435 tax-free allowance during the whole of the current tax year (which runs from April 6 to April 5), you can ask for your wages to be paid without tax taken off. You need to fill in form P38(S), which you can get from your employer. If you don’t get around to filling in the form, you can still claim the tax back, but obviously, if you are short of cash right now, you want all your earnings up front.

You will also probably have to pay National Insurance, unless you earn less than £87 a week.

If your earnings are below this figure you pay nothing and get no benefits. If you earn between £90 and £105 you still don’t pay anything, but the Government credits you with NI payments, which, if they add up to enough, count towards state benefits such as your old age pension. At your age you are probably not much bothered about this, but it is nice to know that you are getting something for nothing.

Keep your debts under control

If you have just finished your course, don’t worry about paying your student loan off tooquickly. First of all you don’t need to start paying it off until the April after you finish your course, and then only if your income is over £15,000 a year. Second, it is cheap money: you pay interest only at the rate of inflation, so, if you have savings, you can probably earn more interest on the cash than you can save by not paying interest on the loan.

Credit card and unauthorised overdraft debt are another matter – they are expensive, and the effects of compound interest make them rack up very quickly. Make sure you know what rate you are paying on both types of debt, and pay off the highest rate first.

If you have an unauthorised overdraft, talk to your bank and ask them to put your debt on to an authorised basis if possible. Unhelpful banks may simply give you the Spanish Archer (elbow), but others can be remarkably tolerant, and it is certainly worth asking.

If you are graduating, make sure your bank knows what your plans are. Your student account will probably be turned into a graduate account. Make sure you know what the terms and conditions are, and how soon you are going to have to pay back your free overdraft, if you have one.

If you are going on to further study, once again see what facilities the bank can offer you. Check out www.moneyfacts.co.uk for the best deals on graduate loans.

Overseas travel

Some lucky students will be heading for foreign climes. You will have sorted out your flights and accommodation, but don’t pay too much for your foreign money!

Using the wrong method of payment can add considerably to your holiday bill. According to the comparison website www.moneysupermarket.com, British travellers could save £1.3 billion this year by shopping around for the best deal on foreign currency.

When you pay bills in a foreign currency there are all sorts of hidden charges and commissions, so be aware what these are. For instance, the exchange rate may vary depending what method of payment you use – changing cash, paying by credit card, using travellers cheques or taking money from a cash machine – and there may be charges, such as cash machine fees, that you are not used to at home.

Although credit cards usually carry the Mark of Cain as far as students are concerned, there are two cards – Nationwide and the Post Office – that are among the cheapest methods of paying for goods and services abroad (note: not for taking out cash – credit cards are a very expensive way to get cash). This is because these cards do not charge “exchange rate loading” – the sneaky extra 2.75% that most other cards charge for use abroad.

Nationwide’s card is notoriously hard to get hold of if you don’t have a steady income, so is not widely available to students. But, if your parents are lucky enough to have one, ask to be made co-signatory. If they trust you enough to let you run up a bill on their card, as long as you pay them back – and the card company has to be paid back immediately to avoid interest –  you could save a fair bit on your holiday spending.

Foreign currency

Beware 0% commission deals - because in many cases the amount that would have been charged in commission is reflected in a poorer exchange rate. Make sure you are getting a genuinely good rate for your foreign currency. Remember that many student bank accounts waive commission charges on foreign currency as part of the package – so you may get a better deal from your own bank.

If you are getting currency other than from a bank, consider Travelex, Marks & Spencer and the Post Office, which tend to offer the best deals. If you are using the Post Office, don’t pay by credit or debt card, as the transaction may count as a “cash advance” depending on your card (including even some debt cards). Withdraw cash from the bank and then change that into currency.

Getting cash abroad

Ask your bank if they have partner banks abroad – you may pay less or nothing in cash machine charges.

For instance, cash machines are free for Barclays customers at branches of Westpac in Australia and New Zealand, Scotia Bank in Canada, BNP Paribas in France, Deutsche Bank in

Germany and Bank of America in the US.

Travellers’ cheques and prepaid cards

Travellers cheques are a bit old hat, but some people prefer them. They have been largely replaced by “electronic travellers cheques” or prepaid cards.

The Cash2Go pre-paid card is the best in terms of fees, while the Western Union Travel Cash Card is the worst of comparable products. Make sure, however, that you get a card with the features you want – for instance, do you need it to be able to be topped up from home while you are abroad?

Other cards you might like to look at are those offered by American Express; the Post Office and Travelex (but buy your card from Travelex direct and not from other outlets such as travel agents if you want to top up on line).

Dynamic currency conversion

This is a way of charging you for goods and services in sterling when you use a credit card abroad. It may suit you to know exactly how much you have spent if you are working to atight budget, and you may appreciate being billed in pounds. However, DCC exchange rates tend to be very poor, and if you have a fee-free card such as Nationwide’s, you don’t get any advantage from it under DCC. Retailers are supposed to ask you to choose if you want to pay in sterling or the local currency. To save money, choose sterling.

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