One of the biggest challenges that students face is managing their money. If you're a university student, you may be wondering how to budget for your living expenses and avoid financial debt. How much living allowance do you need? How can you balance your expenses yet still enjoy an active student life? How can you avoid getting into debt or running out of money before the end of the month? How do you cope with emergencies or save for future goals?
Don't worry, FromHighSchooltoUni has got you covered. In this blog post, we'll show you how to create a realistic and effective student budget that works for you. You'll learn how to estimate your income and expenses, track your spending habits, and adjust your budget as needed. What's more, when you sign up as a member on our FromHighSchooltoUni.com website, you'll get access to a sample student budget and a student budget calculator that will make your budgeting process much easier. You'll also get access to other helpful resources such as checklists and templates to help you manage your move to university in the most efficient way.
The importance of budgeting for students cannot be overstated. It’s a skill that will help you manage your money wisely and achieve your financial goals. It’s not as hard as it sounds, though. All you need is some planning and discipline.
By following FromHighSchooltoUni's simple steps, you'll be able to create a student budget that will help you achieve your financial goals and enjoy your time at university without worrying about money. Ready to get started? Let's dive in!
Why do you need a student budget?
Well, a survey conducted amongst UK-based university students in 2020 revealed that over 70% of them worried about making ends meet, and yet at least 10% of them had never even attempted to compile a budget. The survey results also showed that most students who dropped out in their first year at university did so due to money worries. Don't let that happen to you!
As a university student and newly-independent adult, budgeting can be a daunting task, especially when you are juggling classes and potentially a part-time job too. The good news is that it doesn't have to be complicated, and you will not be in class full-time, so you will definitely have time to manage this!
By following a few simple steps, you can easily create a successful budgeting plan to help you mane your finances throughout your university years.
Step 1:
Why do you need to create a student budget?
A student budget is a plan that shows how much income you have and how much you spend on different categories. You need to make your funds stretch to cover all essentials, such as rent, food, transportation, mobile phone costs to socializing.
A student budget can help you:
Avoid getting into debt or running out of money before the end of the month
Track your spending habits and identify areas where you can cut costs
Enjoy your student life without worrying about money
Save money for your future goals or emergencies
It may be fun to have a night out clubbing, but if that means eating toast and drinking water for the rest of the month because you have no money left to buy food, was it worth splurging on alcohol, or could you budget appropriately to make sure each month you know how much you have to cover your social funds? Even if you are lucky enough to be receiving a scholarship or student loan, this does not mean you have a bottomless pit of money. You still need to be responsible and smart with your finances.
Step 2:
What is your current financial situation?
The first step to creating a student budget is to estimate your income and expenses. Your income is the money you receive from various sources, such as:
Scholarships or grants
Student loans
Part-time or full-time jobs
Savings or investments
Family or friends
This is your Income. Calculate the total income you will have at your disposal over the academic year.
Step 3:
Set up a budget
First, identify your essential monthly expenses. Your expenses are the money you spend on various things, such as:
Rent
Utilities (electricity, water, gas, internet, etc.)
Food and groceries
Transportation (car, bus, train, bike, etc.)
Education (tuition fees, books, supplies, etc.)
Health (insurance, medical bills, prescriptions, etc.)
Personal (clothing, grooming, hobbies, etc.)
Entertainment (movies, concerts, eating out, etc.)
Savings or debt payments
To estimate your income and expenses, you can use different methods, such as:
Looking at your bank statements or receipts
Using online tools or apps (such as our student budget calculator in Member Resources)
Asking for advice from your parents or financial advisors
The key is to be realistic and honest with yourself. Don’t overestimate your income or underestimate your expenses. Try to account for every penny you earn and spend.
Step 4:
Track your spending
The next step to creating a student budget is to track your spending habits. This means recording every transaction you make and categorizing it according to your budget plan.
Tracking your spending habits can help you see where your money goes and how much you spend on each category, identify areas to save money or reduce costs, and adjust your budget if necessary.
So how do you get started?
Deduct your projected essential expenses from your monthly or weekly income. After you’ve deducted the rent, electricity, WIFI, mobile phone, etc you will have identified your budget limit for food, personal items and socializing.
What is the leftover money for? The remaining figure is the funds available for socializing, clothes, and emergencies.
How do I know how to prioritize my funds? Remember that bills and essentials come FIRST, not a new pair of Converse just because they will go with your outfit this week. Ask yourself if you NEED a nice-to-have, and have you paid your essential bills yet or done your weekly food shop.
Make adjustments – if you find that you are spending more in one area, you can make cuts in another area to compensate. You may find you over-budgeted for food, whereas you’ve been sensible in batch cooking and buying bargains, therefore the savings you made can be put towards savings or socializing!
How can I improve my budgeting skills? There are a number of apps available like Monzo or Zently to help you budget effectively. Check out our website (Member Resources) for a helpful budget calculator template that does the work for you while you plug in the figures.
The key is to be consistent and accurate. Don't skip any transactions or forget any categories. Try to track your spending habits daily or weekly.
Step 5:
Save money where you can
When you’re out shopping, remember that the store brand is probably just as good as a well-known brand label, and go for the cheaper version, which will help your budget stretch that much further. Does a designer label shower gel wash your body any better than a store brand? No! Save pennies where you can!
Research student discounts in all domains from bank accounts to shops, to Amazon StudentPrime to restaurants. Download UniDays app and check out their offers – you can identify all the shops local to your area, and plan your purchases accordingly. You will be entitled to discounts when you show your Student ID card, so use it! Sign up wherever you see applications or apps for store cards (the member kind, not credit card kind!) for shops that you will use regularly. Examples are supermarkets / grocery stores, drugstores, health food stores, restaurants, etc. Every purchase will enable you to collect points which will give you immediate or periodic discounts as a student. You can even get a student discount with Waterstones and order our book through them!
Managing your monthly allowance
It is important to be flexible and proactive with your budget. Don't blow your monthly allowance the day you get it. Unless you're earning well with a part-time job to supplement your income, your funds have limits. It will take you a while to get used to budgeting, but you can do it! Adjust as necessary on a monthly or quarterly basis.
How to Budget for Your Living Expenses as a Student
Budgeting for your living expenses as a student is not as hard as it may seem, but it does take some planning and discipline. You just need to follow some simple steps and the advice in our book: estimate your income and expenses, track your spending habits, and adjust your budget as needed. By doing so, you’ll be able to save money, avoid debt, and enjoy your university life without worrying about money. You'll also learn valuable financial skills that will serve you well for the rest of your life.
If you want to make your budgeting process even easier, subscribe as a FromHighSchooltoUni member on our website and get access to our student budget example and calculator. You’ll also get access to other helpful resources, such as checklists and templates, that will help you with every aspect of student life. Don’t miss this opportunity to take control of your finances and achieve your goals. Subscribe now and get started today!
Finally - read our other blogs on the website and Instagram posts (@fromhighschooltouni) for tips and tricks for student savings such as meal planning, efficient food shopping, etc.
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