Student budgeting guide
Anxious about getting through uni on next to no income, or just keen to learn how to make your Student Loan stretch further? You're in the right place!
70% of you revealed to us in our National Student Money Survey this year that you wish you'd had a better financial education before coming to uni – so if you don't have a clue how to budget, you're definitely not alone!
We know, it's not the most glamorous of subjects. But consider the next few minutes you spend learning how to manage your money a lifetime investment!
We've got a budgeting spreadsheet for you to download, a list of the handiest student budgeting apps, and a budgeting hack that could save you hundreds a year – so let's get cracking!
What’s on this page?
Budgeting might seem pretty boring and dull (something your parents told you to do but you never quite got round to), but there are loads of benefits to tracking and controlling your spending.
Imagine your bank account is like a leaky bucket. Every now and then a tap opens to fill it up - this is your income.
But your bucket is full of holes which are leaking your money. The water level will constantly be changing but so long as there's always enough water in the bucket at any one time, there's no problem.
However, there is a problem if the water level gets too low. Then you have to start plugging those holes (your spending habits) - which is where budgeting comes in. It helps keep the water level consistent so you can continue to spend money on the things you need and enjoy (within reason, of course).
Whether you're trying to save up for a big spend like a holiday or new video games console, or whether you just want to be prepared for emergencies (we're talking broken laptops and smashed phone screens) a strong budget is exactly what you need.
How to set up a student budget
Your basic budget is as simple as listing all the money you’ve got coming in, tracking how much you spend, and seeing whether they balance out.
Once you've done that you can set goals to help you curb your spending and start saving more money. Here's how to do it in four easy steps...
Establish your income
First up, you need to work out much money you've got to play with. This will set the parameters of your spending, so think carefully about every possible source of revenue.
Common student income streams
• Your Maintenance Loan
• Extra money from scholarships, bursaries or grants
• Money from your parents – use our parental contribution calculator to see how much the government expects them to give you
• Salary from a part-time job
Estimate your outgoings
Next up you need to figure out where all your money is going. You can either look back at your bank statement to tot up all your previous purchases, or simply input a rough estimate of how much you think you spend on each category.
Use our average student living costs as a guide to how much you could be spending
Essential student expenses
• Bills – don't forget contents insurance, gas, electricity, water, broadband, your TV Licence (if you need one) and mobile phone contract
• Food shopping
• Course supplies – textbooks or specialist equipment
• Daily travel – This could be your daily bus/train/Tube fare, or fuel, insurance and tax for your car.
Non-essential student expenses
• Nights out – think of alcohol, entry, taxis and takeaways
• Eating out
• Hobbies – cinema tickets, gigs, festivals, books etc.
• Gym membership
• Haircuts and other beauty expenses
• Digital services like Spotify or Amazon Prime
• Travelling – flights, hotels and sightseeing.
Figure out your weekly budget
Once you've got all your expenses laid out before you, it's time to break it down into a weekly budget. Brace yourself, as this is where it starts to get real!
• Work out your total income for a term at university
• Minus your essential expenses for the same period
• Divide the number you're left with by the number of weeks in a term.
You've now you've got your weekly student budget – in other words, how much money you've got to spend on all those non-essential things each week
For example, if your income across first term is £3,000 and your essential expenditure adds up to £1,500, you would have £125 a week (across a 12-week term).
It's better to budget your expenditure per week rather than per month, as it's easy to go overboard at the start of the month and be penniless by the end.
Note: remember that if you receive a maintenance loan it will be paid to you in 3 equal chunks at the start of each term.
Set yourself some goals
So if you follow the steps above and come out with a reasonable weekly budget then, great! But what if you're left with a tenner to live off each week (it can actually be done!) or no money at all?
Whether you need to budget to get by, or you're trying to cut back, it's all about setting goals to either reduce your spending or boost your income.
If you realise you're spending £50 on takeaways each month, you could try reducing it to half of that amount.
Trying to remember all this off the top of your head is obviously pretty difficult – which is where budgeting tools come in...
Student budgeting tools
So we've explained the basics of setting up a student budget. But if you don't have the time or the mathematical knowledge to start from scratch, there are plenty of tools to help you along the way.
Student budgeting spreadsheet
Many students have told us that our student budgeting spreadsheet has been a lifesaver for them at uni.
This is ideal if you're not big on maths, as the spreadsheet will do everything for you. Simply plug in all of the money you have coming in each month, then log your expenses in the section below.
The spreadsheet will then do the calculations for you and track whether you’re living within your means each month.
You can budget as you go, but it’s also a great tool if you’re working out whether your finances are going to fit your future spending – such as planning for the uni year, if you can afford a holiday during summer, etc.
The aim of the game is to keep your balance (the money that’s left over after you’ve accounted for spending) in the black – and ideally have a few quid left over each month to squirrel away or use to treat yourself.
If you find you’re overspending – or it looks as though your budget won’t match your expectations – you’ll need to find ways to bring it back in line.
This one isn't so much of a tool, but a super easy and useful trick that could help you save hundreds of pounds a year.
The idea revolves around the psychology that you'll only spend what you can easily access.
When you receive your student loan (or any other income stream) into your student bank account, transfer it into a separate current or savings account (free to set up).
Set up a recurring payment (such as a Direct Debit or standing order) each week to transfer across your weekly budget into your normal spending account.
This is easy to do with internet banking, and will gradually feed the money you need into your account, preventing you from going overboard when you first get paid.
If you ever need more cash one week, you can simply transfer some more money across manually - but at least you'll be thinking about whether you really need it first!
Not only does this give you a (sort of) weekly pay day, it helps break bad spending habits and ensure your money will last until you're next paid!
Student budgeting apps
Technology has made budgeting easier than ever, and new banking apps can help you keep a close track on your finances at the touch of a button.
Some of these apps also have savings features which help you to set aside small amounts of money each week, as well as traditional banking functions like overdrafts, in-credit interest and joint accounts.
We've reviewed and ranked the best banking apps so you can see which ones would be most suitable for you.
15 ways to make your money stretch further
So now you've got your budget all set up and ready to rock, here are a few practical savings steps to help you get off to a rolling start!
- Ask yourself: do you want this, or need it? Spend your money on the stuff you need first, and save the 'wants' for special occasions
- Try to cut out the everyday money-draining monsters (we're talking coffees, cigarettes, takeaways...) that eat into your finances
- Make sure you're getting all the Student Finance that you're entitled to, including any grants, bursaries or scholarships up for grabs
- Give yourself a set allowance for each of your spending areas, such as going out or food shopping – and stick to it. If at the end of the month you've underspent in one area, you can carry that over to the next month, or use it to supplement your budget in another area for that month. Shopping trip!
- If you really struggle to track daily spending, take a set amount of cash out at the start of the week and use that instead of paying by card
- If you can manage it, always siphon off some of your income at the start of the month and put it into a savings account or ISA. If you make it to the end of the month with cash to spare, squirrel that away for a longer-term spend instead of blowing it on a quick fix
- Recycle everything. If you’re done with something, and it's still usable, sell it on for cash or swap it for something else. Likewise, never buy new if you can get it just as good from someone else for less cash. This works for clothes, furniture, textbooks, you name it
- Never stick with your bank account just to be loyal – loyalty doesn't pay in this game! And some banks will even give you a cash incentive to switch
- Look around for deals on your bills like gas, electricity and broadband. You can often save a boat-load of cash just by switching to a cheaper supplier
- Open a second bank account for any lump sums you receive (maybe your loan, grant, or some inheritance money perhaps) and set up a direct debit so it drip-feeds into your current account in small doses. This way, you won't go crazy on the spending when a chunk of cash comes in, but you'll still benefit from a little bit of extra cash each month.
- Planning ahead does wonders for your bank balance. This applies to weekly meals, nights out and even the odd occasion when you decide to eat out. Try to know what you're doing and when as much as possible so you can plan ahead and budget accordingly
- That said, don’t live like a monk 24/7. It's important to still have fun and do the things you love! Just plan ahead for splurges so you're never left with any nasty surprises on your bank statement
- You can also try out a few of these hacks for generating a small passive income – you won't see your bank balance shoot up immediately, but over time you'll start to see a profit.
- Keep an eye out for deals! Join our WhatsApp group and sign up for our weekly newsletter, and we'll do all the hard work for you
- Be your own person. Don’t concern yourself with how much money your friends are making or spending – just stick to your own budget and keep your eyes on the prize. It'll pay off eventually, promise!
Now it's over to you! This all probably sounds a lot scarier than it actually is – once you get into the swing of things you'll find watching your bank balance slowly increase weirdly addictive, and you'll eventually stop caring about splashing out on luxuries every other day.
Just think how sweeter they'll taste when it's time to treat yourself!
App-based banks can be the perfect way to budget and track your finances at university - we rank the best!