For new students freshers’ week should mark the beginning of an exciting adventure, but easily avoidable financial mistakes can turn university into a nightmare.

According to Save the Student’s latest National Student Money Survey, eight out of 10 worry about making ends meet, two-thirds say their diet suffers because they are short of cash and more than half say this affects their academic performance.

Because Scottish students don’t pay tuition fees, they typically graduate with less debt than those in the rest of the UK. However, the amount they owe is rising faster than elsewhere.

The Student Loans Company puts the average debt of Scottish graduates at £10,500, up nearly 12 per cent in a year. Although under half the £24,640 owed by those from England, it is a significant burden.

For many, lack of basic money management skills is a contributing factor. A quarter of those taking part in the national survey admitted they never budgeted, and two-thirds confessed they didn’t understand their student loan agreement.

To keep debt to a minimum, it is essential to develop good habits from the outset. That begins with choosing the right bank account and not being swayed by the free gifts on offer.

Rachel Springall, finance expert at personal finance website Moneyfacts, said: “Some perks are just gimmicks and don’t really give much value to the longevity of the account. Researching all the available accounts and weighing up the various overdraft facilities should be the first step to finding a suitable deal.

“However, this should also be viewed with caution. Using an overdraft facility is an effortless temptation, and while they’re designed to help students cover expenses, they should never be abused as the debt will need to be paid back.”

She added: “The best interest-free overdraft facility currently on offer is a generous £3,000 upfront, available from both Halifax and HSBC. Alternatively, other accounts spread the amount given to students over the years of their study, which can be a much more sensible option for some.”

The Association of British Insurers says the average student takes belongings worth £3,500 to university and one in five will be the victim of theft, so it is vital to have adequate insurance. This could involve extending the family policy, arranging independent cover or taking the one provided by halls of residence.

The majority of household policies will include students’ belongings, but cover varies and there are likely to be strict conditions.

Ben Wilson, from price comparison website Gocompare, said: “It’s important to check the policy terms and exclusions to make sure this is an appropriate option. For example, there may be restrictions on the type of accommodation the student will be living in and cover for valuable items and bicycles may be excluded.

“We’d advise people to call their insurer to inform them of the change in living arrangements and to clarify the cover available. Parents should also note that any claims made under the family’s home insurance may affect their future premiums. So, it’s worthwhile looking at and comparing the other options.”

For long-term financial health, draw up a weekly budget – and stick to it. Paying for necessities such as accommodation, food, bills and travel must come first.

Keep the bulk of the term’s cash in a savings account and set up a monthly or weekly transfer into your current account. Never carry more than a single day’s money and don’t be tempted to withdraw extra or borrow from friends.

If you pay utility bills, use comparison sites to look for better deals. If your phone contract is due to end, move to a cheaper tariff or go SIM only.

Always compare prices and take advantage of appropriate special offers and discounts. If you are self-catering, plan and buy for a week’s meals at a time. Never shop on an empty stomach and take a list so you aren’t tempted by non-essentials. Go late in the day, when prices are often reduced, and bulk buy with friends to save even more.

Borrow books from libraries or buy second-hand, and set strict spending limits for going out and other luxuries.

Don’t dip into your overdraft until it is unavoidable and don’t be tempted by credit and store cards or personal loans – all borrowing must be paid back. Keep a close check on your bank balance to avoid going over your limit, as paying penalty charges is like burning money.

If you find your finances slipping out of control, talk to your bank and student advice centre right away.

Case study

When Katie Paterson from Glasgow did her degree at Strathclyde University she took a succession of part-time jobs to make ends meet.

Katie, who studied English literature before moving to Amsterdam for a research masters, worked in a coffee shop, an internet café and a clothes store in addition to doing babysitting.

She said: “A lot of students worry about juggling a job and university simultaneously, but I found having a part-time job encouraged me to manage my time better, and I always did better when I had a job on the side.

“The stress of not having an income can outweigh the stress of having to go to work a few hours a week, and it can be nice to get a bit of a breather from the library too.”

Katie, who is now an editor at Savethestudent.org, added: “If there’s one thing I would’ve done differently it is take advantage of the financial perks. Working for Save the Student has made me realise how much money I could’ve saved if I’d done a bit of research.

“You won’t see discounts and privileges like this again until you’re a pensioner, so I’d strongly advise whipping your student card out at every opportunity.”