How to Budget
You wouldn't have been able to write an essay without being taught how to at school. So you will need to learn how to budget. We recommend this online guide from Save the Student.
The online guide takes you through setting a budget step-by-step. You then download the budgeting spreadsheet and fill it in.
We tried it - here are our tips
We filled in both the monthly budget sheet and the weekly budget sheet. It took quite a long time - be prepared to spend at least an hour on it. It's worth it though!
We had to add in an extra row above the "Week numbers" at the top of the spreadsheet, and put the day the week started in the extra row (click on the cells of our example spreadsheet under Resources below to see a quick way of putting the right dates in).
1. Money Available
The first thing you need to do is to enter the money you have available to spend in the purple section, next to where it says "Starting balance for the month" in bold lettering.
Many students count their interest-free student overdraft as income, and it is good financial management to do this (it is 0% interest borrowing, and most banks give you three years after graduating to clear any overdraft).
If your account is in credit, add your full interest-free student overdraft to your balance.
Balance = £329.01
Overdraft = £1,000
Money available = £1,329.01
(£329.01 + £1,000 = £1,329.01)
If your account is overdrawn, take the amount of your interest free student overdraft as a positive figure and then subtract the amount you are overdrawn by (also as a positive figure).
Balance = £329.01 OD
Overdraft = £1,000
Money available = £670.99
(£1,000 - £329.01 = £670.99)
Then add all of your different types of income in the green section. Don't include either your tuition fees or your Tuition Fee Loan, as Tuition Fee Loans are paid directly to the University by Student Finance England (or equivalent). You can overtype the descriptions of each type of income to help you keep track, and you can insert extra rows if you have more sources of income.
If you plan to supplement your student income with part-time work you will have to guess your income to start off with.
Then add all of your different types of expenditure in the red section.
This is where you might have to play around a bit. Enter your fixed costs first (the ones that you can't change e.g. College accommodation/rent).
You might have to estimate some costs e.g. utilities if you're in private rented accommodation. The Costs section of these web pages will give you an idea of what other students spend to help you estimate and there is also a link on the budgeting spreadsheet which you can click on to get average student living costs.
Then enter your non-fixed costs (the ones that you have control over e.g. social, clothes & shopping). You will have to estimate how much you're going to spend, again the Costs section of these web pages will give you an idea of what other students spend / what the recommended expenditure is.
You can add extra rows to the spreadsheet if you have other costs, or you can overtype existing costs that you don't have.
To look at how your finances will pan out across the year, you will need to fill in every month's "Actual ending balance" in the purple section with the figure in the "Predicted ending balance" otherwise the spreadsheet won't work (the spreadsheet takes each month's "Actual ending balance" and turns it into the next month's "Starting balance for the month"). We didn't bother to do this for the weekly budget sheet at this stage.
If your expenditure is less than your income, lucky you! You can increase your non-fixed costs if you wish, or you can plan on saving a certain amount monthly. We recommend that you budget so that your income is at least £250 higher than your expenditure across the academic year. You will always have extra costs you didn't predict.
If your expenditure across the entire year is more than your income see if you can cut down on your non-fixed costs. If not, check out our Other Sources of Income page.
4. What Next?
Now you've got to stick to your budget!
We think that the best way to do this would be to print out a copy of your expenditure budget and stick it on your noticeboard. Then go into your online banking at the end of each week and check your balance. Put this figure in the Actual ending figure for that week on your weekly budget sheet. Your challenge each week is to spend less than your budget - if you spend more you will need to cut down next week.
Once you get used to doing this it will only take about 15 minutes each week. Pick a time each week and stick to it - Sunday afternoon is a good time.
You should also update your monthly budget sheet at the end of each month. Add up how much you've spent on each category of expenditure. If you've spent more than you should you will have to cut down in the next month. If you've spent less than you budgeted you can save the extra or adjust your budget so you have more to spend in the future.
Click under Resources below to see our completed spreadsheet (we pretended to be a student!).
- Sample Student Budget (last modified: 14 August 2019)
Practice Makes Perfect
You won't get it right first time! Setting your budget is hard, and sticking to it can be harder. Essay crises, changes to your personal circumstances, exam stress and even the knowledge that you'll have student debt when you graduate can make you spend more money than you should. This is normal. Just keep checking your spending at the end of each week and month and you'll be able to take action to either cut down on your spending or find some extra cash from somewhere.