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Budgeting Taking control of your money as a student

Budgeting Taking control of your money as a student

Starting at university is a very exciting time; there are lots of new things to try, new people to meet and new skills to learn.

For most students one of the most important new skills to develop is learning to manage your money. Even if you are used to managing your money, due to the way students are paid in termly instalments, you will probably find you will need to revisit how you budget. Like all new skills this will mean investing time and practice. Don't worry, there is lots of help available in your university so if you need help then just ask. Use the information below to get you started.

Put simply a budget is a tool for you to use to keep track of your money. By working out a forecast of your income and expenditure you are more able to keep a watchful eye on where your money is going and, in some cases, can make savings so that your money will last until your next student finance instalment.

Students funding is paid in huge termly payments so it's fair to say that if you don't break your spending down into smaller monthly (or better still weekly) amounts you are likely to overspend at the start of the term and then struggle later. This is not because you are no good with money, its hard to visualise how much money you have when it is paid in termly.

Its important to stress that learning to manage your money is not about being good at maths; the maths part is the easy bit as we can hopefully all use a calculator. Managing your money is about having the motivation to keep your spending on track and understanding the impact of not sticking to your spending limits. Managing your money is one of the skills we all need to develop if we want to look after ourselves. Financial wellbeing is just as important as physical and mental wellbeing and to succeed at university (and life) you will need to have them all.

Start at the very beginning

How you decide to approach your budget is about personal preference. You may be the sort of person who likes visual charts or spreadsheets, or be more of a maths and stats person.

Here is one of the tricky parts for students, your rent may be paid termly, your travel weekly, your phone monthly etc. To work out your budget accurately, you need to break things down into the same unit of measure so you can calculate things correctly. Weekly tends to be the easiest way as the units are smaller more manageable.

Therefore, if you pay for something monthly, multiply the monthly amount by 12 (months in the year) and divide by 52 (number of weeks in the year).

If something is paid termly, work out how many weeks between your student finance payments (including the holidays) and divide the total by this number.

Your student finance is paid to you termly so to break this down into a weekly figure you need to count the number of weeks between payments (remembering to include the holidays).

The other really important point to note is that all three terms are likely to be different lengths. So even though your rent and student finance payments may all be the same or similar amounts, your disposable income will vary each term.

You can find lots of resources to help you with these calculations on the internet. See useful links below.

Step one start with your expenditure: -Go through your bank and credit card statements, get your tenancy out and work out your essential expenditure costs such as rent, phone and travel costs plus a realistic amount for food.

Step two look at your income: - Gather information and then add up any income you have so this will be from student finance plus any income you have from a part time job, any regular money from family and also any other income such as bursaries or scholarships.

Step three:- Enter this information into a spreadsheet, reliable budgeting tool or simply use a notebook.

What's next?

Once you have calculated your essential income and expenditure you should be able to work out what you have left to live on and enjoy for non-essentials such as leisure activities, haircuts, etc. Food tends to be something that students spend a lot of money on. So think about the following: -

  • Buy own brands if possible.
  • Don't shop at the local mini supermarket that will be closest to your accommodation. These are expensive. Instead use local markets, discount stores or cheaper supermarkets. Your university or student union should be able to give you information about where to find these.
  • Learn to cook and freeze a few dishes that you can portion and use for lunches and late-night snacking (instead of ordering takeaways).
  • If you like hot drinks invest in a good quality thermos cup and take a drink with you. This will save you 00s over the term.
  • You can find lots of cooking on a budget and freezing ideas on the web.

My expenditure is more than my income, what can I do?

Once you have done this exercise if your expenditure is more than your income you need to think about where you can save money or increase your income and possibly get some help and advice from your university.

The most important thing is don't panic but do ask for some help if you need it. All students will have difficulties with some element of university at some point whether that be money, studying, living away from home etc. Universities have support staff you can talk to, and most universities have hardship funds you can apply for if you need additional financial help. You are not alone so if you need help you just need to ask

information about student budgeting tools
information on where to start with your budget
national debt charity that has lots of helpful resources including a budget planner
small bite sized lessons to improve your financial literacy

By Lynne Condell - Student Money Advice Specialist

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