Budgeting For University Students: Smart Money Management

Budgeting is an essential skill for university students to master, as it can help them graduate without massive debt. With rising living costs and other financial challenges, such as the pandemic, budgeting can help students manage their money effectively and ensure their finances are allocated according to their needs and wants. This involves tracking spending and income, and there are many tools available to help students do this, such as spreadsheets, online calculators, and apps. Students can also take advantage of student discounts, free services, and financial literacy workshops to help them save money and spend wisely.

Understanding income and expenses

Understanding your income and expenses is the first step to creating a student budget. This involves listing all your sources of income and expenses, and then dividing your expenses into essentials and non-essentials.

Your sources of income may include your student loan, a part-time job, scholarships, grants, or any other income streams. You may receive some of this income in one-off or bulk payments, so it's a good idea to divide these by the number of months the money has to last to calculate a monthly figure. Once you've listed all your sources of income, add up the amounts to get your total monthly income.

Next, you'll want to list and categorise your expenses. Essential expenses are those that are necessary and regular, such as rent, food, and bills. Flexible or non-essential expenses include socialising, hobbies, and snacks. It's a good idea to check bank statements, receipts, and banking apps to get an accurate picture of your spending. You can also use a breakdown of student spending to help you identify areas of spending you may have overlooked.

Once you have a clear understanding of your income and expenses, you can start to allocate your income accordingly. A popular method for doing this is the 50/30/20 rule, where 50% of your income is allocated to needs, 30% to wants, and 20% to savings. However, this rule can be customised based on your personal financial situation and adjusted as needed.

In addition to allocating your income, there are a few other strategies you can use to manage your expenses. For example, you can cook at home instead of eating out, buy in bulk, and take advantage of sales and discounts. Planning your meals in advance can also help to avoid impulse buying and reduce food waste. If you have a car, consider the costs of maintenance and MOT, and explore alternative options such as public transport, walking, or car-sharing schemes. Finally, remember that as a student, you may be eligible for various discounts and exemptions, such as free medical prescriptions (in some countries), student discounts with an NUS or Totum card, and travel discounts with a 16-25 railcard or similar.

Budgeting methods

Budgeting is a financial plan that helps you to manage your money. It is a detailed outline of your expected income/allowance with expenses commonly broken out on a monthly basis. Budgeting gives you a big-picture view of your money, so you can make informed spending and saving decisions, ensuring that your money is allocated according to your needs and wants.

There are several budgeting methods that can help you to manage your finances as a student. Firstly, you can use a budgeting spreadsheet to keep track of your income and expenses. You can input your income and log your expenses, and the spreadsheet will calculate and track whether you are living within your means each month. Alternatively, you can use a budget calculator, which is simpler but may be harder to save and edit.

Another budgeting method is the 50-30-20 rule, where you allocate 50% of your income to needs, 30% to wants, and 20% to savings. This framework helps set realistic expectations around saving and spending your monthly income. It is important to note that this rule can be customized based on your personal financial situation and the allocation percentages can be adapted.

Additionally, you can use the standing order trick, which involves transferring your student loan or any other income into a separate account and setting up a recurring payment to transfer your weekly budget into your spending account. This prevents you from overspending.

Other tips for budgeting as a student include cooking at home, buying in bulk, taking advantage of sales and discounts, and planning your meals in advance to reduce food waste. You can also look for discounts, such as with an NUS or Totum card, and consider getting a part-time job that fits around your class schedule. Finally, it is important to understand your expenses and determine what is essential and what is desirable but not essential. For example, relying on takeaways and ready meals can cost more than cooking at home, and a car can be expensive to maintain, so public transport or car-sharing schemes may be cheaper.

Financial goals

To ensure your budget is on track, it is important to understand your income sources, expenses, and financial goals. Your student budget should include income from jobs, scholarships, grants, and any other sources. Expenses can be divided into essentials, such as rent and food, and non-essentials, like entertainment and hobbies.

There are several ways to save money as a student. Cooking at home, buying in bulk, and taking advantage of sales and discounts can help reduce food costs. Shopping at local markets and planning meals in advance can also save money. Additionally, consider getting an NUS or Totum card for discounts both on the high street and online.

It is also beneficial to cut back on unnecessary spending. For example, relying on takeaways and ready meals can be more expensive than cooking from scratch. Similarly, a car can seem essential, but maintenance and MOT costs can add up; consider public transportation, walking, or car-sharing schemes instead.

Finally, it is important to prepare for unexpected costs. Having a plan for big expenses is crucial. Student insurance can be beneficial in case of emergencies or urgent trips home. Additionally, consider getting content insurance to cover valuable items in your student accommodation.

Student expenses and discounts

As a student, you may be dealing with managing your finances for the first time. Budgeting is a financial plan that helps you to manage your money and ensures that your money is allocated according to your needs and wants. It is essential to keep track of your spending and income to avoid debt.

There are several ways to save money as a student. Firstly, you can open a student bank account. Many banks offer accounts specifically designed for students with no or minimal fees. Secondly, you can take advantage of student discounts. For example, in the UK, an NUS card (now called a Totum card) can get you discounts both on the high street and online. Depending on where you live, you can also get discounts on travel with a 16-25 railcard, a yLink card in Northern Ireland, a Student Oyster card in London, or a Young Persons Coachcard for coach travel.

In addition, you can save money by cooking at home instead of eating out, buying in bulk, and taking advantage of sales. Shopping at local markets can also be cheaper than shopping at supermarkets. It is also a good idea to plan your meals in advance to avoid impulse buying and reduce food waste. Takeaways and ready meals are quick and easy, but relying on them will cost more than cooking from scratch. YouTube has plenty of simple, budget-friendly recipes you can cook if you're not confident in the kitchen.

You can also save money by cutting down on other non-essential expenses. For example, a car can feel like an essential, but maintenance and MOT can be costly. Public transport, walking, or car-sharing schemes are often cheaper.

Budgeting tools

Budgeting is a plan for how you will spend your money each month. It is an essential skill to have, and university is a great time to start practising.

There are many budgeting tools available to help you manage your finances. Firstly, you can use a budgeting app. These can be linked to your bank account to automatically record transactions and provide spending analyses. Examples of budgeting apps include:

• Wally: a free app that helps you track your spending, although it does not automatically record transactions.
• Goodbudget: a digital version of the envelope budgeting strategy, where you allocate money to different spending categories.
• Mint: a well-known free app that makes it easy to create and follow a budget.
• Albert: an app that provides suggestions on how to cut back on spending and gives you access to finance experts.
• Chip: an app that helps you manage your money and save more over time.

If you do not want to use an app, you can always create a budget manually. One way to do this is by using the envelope method, where you put a certain amount of cash into envelopes labelled with different spending categories. Once you have spent all the money, you will need to wait until your next paycheck to restock the envelopes.

It is important to compare the features of different budgeting tools and find the one that works best for you.

Frequently asked questions