Budgeting For Students - The Ultimate Guide - Luxury Student Homes

Budgeting For Students – The Ultimate Guide

University is an exciting chapter in many young people’s lives. Students have so much to look forward to, from studying a subject they are passionate about to partying with their new friends.

However, change can be scary. University makes it necessary for students to do things that they might not have previously done whilst in sixth form or college, like doing their own laundry, cooking for themselves and cleaning up. 

What seems to be the biggest worry for most budding students is money. If this is the case for you, then you have come to the right place. 

For most people university will be the first time they will have to pay for everything by themselves. Or for a lot of students, it is the first time they will have a lump sum of money, and we understand how hard it can be to resist the temptation to spend it on things you want, but not necessarily need.

We have put together the ultimate guide to budgeting for students. We will cover everything from how to create a budget to top tips on how to make extra money during university. 

Why is budgeting as a student so important? 

Budgeting is essential to financially get by at university. Budgeting will help you understand the difference between essential spending and non-essential spending. It is an easy mistake to overspend on your wants (e.g. clothes, alcohol, and takeaways) and not leave yourself enough money for your needs (e.g., rent, weekly food shopping and toiletries).

Once you have established how much your essential spending is, you can then enjoy spending on non-essential purchases without leaving yourself short.  

How to calculate a budget 

Calculating a budget is easier than you might think. Grab a piece of paper and a pencil, and follow these simple steps: 

1. Work out your income

The first step is to work out how much you will have coming into your bank account. This will include your maintenance loan, job income, money from family, grants or bursaries, and any other source of income you might have. 

The maintenance loan you receive from Student Finance England (SFE) is based on your household income and individual circumstances. It will arrive in your bank account in three instalments across the academic year at the beginning of each term.  

Example of income for term one (12 weeks): 

Maintenance loan: £2,000

Job income: £1,500 (£500 per monthly payday)

Term 1 grant: £100

Total for term 1: £3,600

Then, to help you work out how much allowance you can spend each week, divide the total by the number of weeks in the term. For example:

£3600 (total term budget) / 12 (weeks in the term) = £300

2. Work out outgoings

The next step is to work out what your outgoings are. Firstly, you should work out all of your essential outgoings for each week, which can include accommodation prices, weekly food shop, toiletries, insurance, bills, credit card or debt repayments, your phone bill, commuting costs and textbooks.

Example of outgoings for a week: 

Accommodation: £140

Weekly food shop: £20

Toiletries: £5

Insurance: £5

Phone bill: £5

Commuting costs: £10

Textbooks: £20

Total: £205

You can then work out how much you have leftover for non-essential spending by subtracting essential spending from your weekly allowance. For example:

£300 (total allowance for one week) – £205 (total essential spending) = £95

Once you have worked out how much you have leftover for non-essential spending, you can decide how you want to spend it. Non-essential spending can include nights out, clothes, takeaways, cinema tickets, concert tickets and so on. For example:

Nights out: £35

Takeaways: £15

Cinema tickets: £10

Gym membership: £5

Clothes: £30

Total: £95

3. Calculate weekly budget 

Once you have worked out your essential and non-essential outgoings, you can add them up to give you a weekly budget of how much you can spend. 

Budget tracking 

Creating a budget is one thing, but sticking to a budget is another. It can be hard to stick to your budget if you do not use a budget tracker. Budget tracking is keeping an eye on your money, so each time you spend, you should add it into your budget tracker. 

There are a few easy ways to track your budget:

  • Spreadsheets are an easy and free way to track your spending. Many students use this method as it is easy to set up, and if you use an online spreadsheet, you can access it on any device, e.g. your phone or computer.
  • Apps for students like Emma, Fudget or Budget Planner make it easy to set up a budget. All you need to do is fill in your information and it will do the maths for you. You can add your expenses no matter where you are if you have your mobile phone with you.
  • Traditional ways like a budget planner are also great. You can buy a budget planner for under £5 on Amazon, Paperchase, Wilkos and most stationary stores. 

How to get the most out of your money 

Managing your finances as a student can be difficult without setting yourself a weekly budget. But even with a budget, it can be difficult to make your money stretch over a whole term. Luckily, there are many ways you can get the most out of your money as a student:

Most bank accounts in the UK offer student bank accounts. Each will offer various benefits to persuade students to choose their bank. Some of these benefits include a free railcard, interest-free overdrafts, vouchers, free Amazon Prime membership and many more. 

You can take advantage of this by looking at the benefits and finding which would suit you best. So if you know you will need to commute to university every day via train, choosing a bank account that offers a railcard could save you a lot of money.

student calculating budget

A great way to save money as a student is to take full advantage of student discounts. Many stores and restaurants will offer anything from 5%-30% off purchases if you can provide proof that you are a student. You should definitely consider downloading UNIDays, purchasing a Totum card and always carrying around a student ID as proof for discounts at certain stores. 

Another great way to save some pennies is by purchasing second-hand textbooks. Textbooks can be very expensive. Many times you will only read it a handful of times. So you should consider buying books second-hand, and many of them are in great condition. Not only will this help you save money, but it is an environmentally friendly option. 

Additionally, you can access extra money through bursaries, grants or scholarships. All universities will offer money that you do not need to pay back on certain conditions such as academic excellence, for students with learning difficulties or for students who choose the university as their first choice. 

How to boost income 

Sometimes your maintenance loan does not cut it, and if you are not getting any help from your family or through bursaries, grants or scholarships you could be worried. However, there are many ways to make a bit of extra money at university. 

One of these is through a part-time job. Many companies, especially in the food and hospitality, retail and tourism sectors love to hire students and will work around their study timetable or offer weekend work to them. This is a great way to make extra money and it will look great on your CV at the end of university.

joyous student

You can find jobs on online job boards like Indeed or LinkedIn, at student job fairs which universities usually host during freshers week or by calling local businesses to find out about any vacancies they might have. 

Another way to make extra money is through remote or freelance work. Online you can find remote jobs like online tutoring, cold calling or surveys. Or if you have a particular skill like graphic design, video editing or copywriting then you could use online freelance services (e.g. People Per Hour or Fiverr) to find clients. Not only will this help you make money, but it will also improve your CV.

Another way to make extra money is by selling any textbooks that you do not plan on using again. You can sell used books online at stores like eBay, Depop or Amazon. 

What do I do if I am struggling with money?

If you have followed all of our budgeting for students advice, but you are still not in a good financial position, then do not worry! There are still other ways to get help. 

Many universities can give you a helping hand to deal with the financial struggles, as they will set aside ‘hardship’ funds to give to those who are short of money. 

You might be reluctant to ask your family for money or help, especially if you are trying to be independent, but sometimes it is necessary. 

students walking together

Many banks will offer students interest-free overdrafts. Whilst this is a reassuring safety net, you should avoid going into your overdraft where possible, and see it as a last resort. Even though you do not have to pay fees for it, the next time you get money it will pay off your overdraft, which can turn into relying on it each month. 

We hope this guide has been helpful in understanding how budgeting can help you get through university. Good luck with your new adventure at university!