Personal finance tips and tricks for Finnish university students

Vanha ylioppilastalo, (Eng. Old student house) in Helsinki city centre opened its doors in 1870. The house still organises student events and gatherings.
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Overall Finland is a good country for students. We get a free education (even university is free) in one of the best school systems of the world and some really nice social benefits as a student, such as financial aid, housing allowance and a student loan that we don’t even have to pay fully. 

However, at the same time Finland is one of the most expensive countries in the world which means that as a student with limited income, you have to play your (financial) cards wisely. 

How to obtain financial advantage while studying at university? 

Usually, when people think about studying at university, they think about all that freedom enjoyed by young people, but also how expensive it is. In Finland, studying in university or in polytechnic (university of applied sciences) is generally free, but still, most people end up taking student loans and/or rely on their parents for financial aid. Social benefits for students are simply not enough for most students in Finland. 

However, students can learn valuable financial skills for the future during their university years. There are many ways how students can obtain a financial advantage while studying. I have personally been a Finnish university student. So I know from my own (and friends’) experiences some tips & tricks for how you can make the most of your studies financially.

Tip 1: Take student loan

If you are going to graduate from a Finnish university or from a Polytechnic on time (or even 0.5-1 year late), you should definitely take advantage of the Finnish student loan system. This is a no-brainer because of the student loan compensation. The student loan is a government-guaranteed loan for which you can get a maximum of €650 per month. However, I would advise to not take more than €18,000 (the maximum amount which is covered by the compensation) of student debt (unless you use it as an investment loan). 

The student loan compensation means that Kela (Finnish social service agency) pays back part of your student loan if you graduate from university in 6 years and from Polytechnic in 3.5 years. The maximum amount of compensation is €6,200 (- interest which is less than 0.5% yearly). To be able to claim €6,200 (- interests) of compensation, you need to take no more than €18,000 of student loan and graduate on time. 

Tip 2: Learn budgeting and track your expenses – and buy your groceries from big supermarkets or from Lidl

Do you know how much you spend every month? Probably not. Learn how to make yourself a monthly budget and track your spending so you know if you hit your targets or not. Here are some great tips for budgeting. There are many ways to track your expenses. You can your online bank statements, wallet apps or simply Excel. If you’re as obnoxious meticulous as some people at sulonorth, use YNAB

Food is expensive in Finland, and it is especially expensive in small, urban grocery stores. Bigger supermarkets like Prisma or the German grocery store Lidl are the best options. The more often you got to a grocery (or any other) store, the more stuff you buy on impulse. That is why it’s good to have a list and go to a grocery store only once per week if you can 🙂

Tip 3: Find a cheap accommodation

Your rent is probably the biggest monthly single expense you will have during your studies. The cost of living is rising in big cities in Finland. Luckily, every city with a university or a polytechnic has a student housing foundation. However, it might be hard to get a studio apartment in your freshman year through a student housing foundation. Dorm rooms are easier to get and they are very cost-friendly. On top of that, you get to meet new and interesting people. Outside of student houses, there are still many options for housing.

As a student in Finland, you are also entitled to get a general housing allowance that covers some of the housing costs depending on where you live and do you live alone. Note: if you move in with someone (e.g. your partner, friend), you are seen as one household (unless you have separate rental agreements, like in student dorms), thus you only get one housing allowance per household. 

Tip 4: Find yourself a part-time work or work full-time during summers

In Finland, studying at University or at Polytechnic is nearly free which means that you have plenty of free time. Of course it depends on your field of study and major, but generally, you don’t have many mandatory lectures and classes during the week. However, there are quite a lot of independent work you have on your own. 

So, you have plenty of time to work part-time if you want during your studies. If you don’t want to work during academic months, I would suggest you to at least work during the summer. But, be careful that you don’t earn too much!  If you receive a (and who wouldn’t!?) study grant (a basic financial aid for students), you have certain earning limits every year, depending on the amount of study grant you will receive during the year. For example, if you study for 9 months and receive study grant from these 9 months, your yearly earning limit is €12,498 in 2020. 

Tip 5: Think twice before buying anything new – and be careful with subscription services

As a student, you don’t have extra money that could be wasted on stupid things you don’t even need. Still, many of us fall into the trap of random shopping too often. Whenever you think about something that you would like to buy, you should ask yourself whether you really need the item that you think you need. Don’t believe commercials because only you know what you really need. 

Also, borrowing is a good way to avoid spending money on items you might only need on occasion. For example, if you plan to go play tennis a couple of times for fun, rather than buying a racket you could ask around to see if your friends can lent you one.

Other good way to avoid buying stuff are libraries. On top of books many libraries also lent out summer sporting equipment. So do check them out! There also many cheap second-hand markets in Helsinki that sell fashionable, quality clothing for a very reasonable price. 

Subscription services like Netflix and Spotify are great services, but these kind of services can insidiously increase your expenses before you even notice. 

Joonas Saloranta covers Northern Europe investing, macroeconomics and more at the Financial Nordic blog.

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