Student Budgeting Guide

Getting away from home and having the freedom to do whatever you want, when you want to, may be an exciting thought, but you will need to think about how you are going to afford living your life as a student.

In order to avoid maxing out your credit cards or starving yourself, you need to sit down and work out a realistic budget.

Your student loan is not limitless, even though it may seem like you have a lot of money at the start of term. And if you are not planning on getting part-time work whilst studying, your funds will be even more constrained.

Setting a budget and sticking to it should mean you won’t be losing sleep over money worries during your time at uni.

We've put together these tips to help you live a cheap and cheerful student life.

1. Add up your income

The first step is to find out how much money you will have each month. This includes:

  • Your student loan
  • Any grants, bursaries, sponsorships or scholarships you're eligible for
  • Money from your parents or relatives
  • Income from a job
  • Any savings you're not keeping for after you've completed your degree.

2. Calculate your essential outgoings

There are certain items that you will need to have cash for every week and there is no escaping it.

These are the things you need to budget for carefully so that you can always afford to purchase the essentials.

When you start to add up what your necessities will cost you, don’t forget to include:

  • Rent
  • Heat
  • Electricity/gas
  • Water
  • Food
  • Telephone/internet
  • Transportation
  • Study supplies (textbooks, paper, photocopies, etc.)
  • Emergencies (doctor and/or dentist, medication, etc.).

3. Work out what is left

When you’ve made a list of the absolute essentials, this is the bare bones of your budget.

This means that you could live without spending money on anything else at all, though you probably wouldn’t want to!

If you can afford to spend a little more money, you may want to consider allowing for one or more of the following in your budget:

  • Coffee or a meal out
  • A few drinks at the weekend
  • A new item of clothing or two
     
  • Books or equipment for your course
  • Entertainment (DVD rental, cinema tickets, etc.)
  • An affordable splurge (a new CD, tickets to a sports match, etc.)
  • Savings contribution.

4. Know what you can live without

Unfortunately there are some things you will realise you will have to live without during your time as a university student.

The following are some things you shouldn’t really be thinking about splashing out on:

  • Gourmet cuisine
  • Designer gear or shoes
  • Unnecessary technology (big screen television, video game console, computer games, etc.)
  • Weekends away and other short breaks
  • Sun or ski holidays.

5. Set a weekly budget

Once you've calculated all your expenses, it's a good idea to break things down into a weekly budget. Here's how to do this:

•  Work out your total income for a term at university
•  Minus your essential expenses for the same period
•  Divide the number you're left with by the number of weeks in a term.

You've now you've got your weekly student budget – in other words, how much money you've got to spend on all those non-essential things each week.

For example, if your income across first term is £3,000 and your essential expenditure adds up to £1,500, you would have £125 a week (across a 12-week term).

It's better to budget your expenditure per week rather than per month, as it's easy to go overboard at the start of the month and be penniless by the end.

6. Make your money go further

Although splurging money isn’t an option for most students, there are other ways of making good things happen. Remember that you can always:

  • Walk instead of fill up the petrol tank (if you have a car)
     
  • Borrow books and DVDs from the local public library
     
  • Apply for a 16-25 railcard to save a third on rail fares. The only exception is before 10am, where a £12 minimum charge applies
     
  • Swap clothes and accessories with friends
  • Find new clothes at discount clothing stores and charity shops
  • Host a supper at your digs rather than going out
  • Use the university computers and internet connection (instead of your own)
  • Take advantage of a student health centre or gym
  • Always carry your student ID/NUS card with you so you can get reduced-price tickets to cinemas, exhibits, theatre shows, restaurants and more
     
  • Avoid cash machines that charge you to withdraw money
     
  • Don't pay for any medical prescriptions (these are free for 16-18 year olds in England).

Living on a shoe-string budget can be tough, but it’s also a great chance to be creative and find out just how little money you can live on.

Most students find their days at university are rather frugal, but as long as you make a realistic budget and stick to it, there’s no reason that they have to be punishing!

7. Remember to switch deals

It's important to realise that you don’t have to be loyal to the first bank you sign up to, and you should switch banks to benefit from the next best deal. Although it may seem like a lot of effort, switching can reap rewards for many students and graduates.

Banks like students, because these particular customers are investing in themselves to (hopefully) achieve a larger than average salary when they graduate.

Even though you are borrowing money now to fund your education, banks expect you to benefit from this, and so they are hoping you will become a valuable long-term customer.

Banks want to establish loyalty with their student customers, and have good chances of keeping you for life once you’ve opened a bank account with them.

Postgraduate Bank Accounts

It used to be that banks had specific accounts for postgraduate students, but now in most cases postgraduates can either apply for (or switch to) a normal student bank account or extend a student account already held.

To be eligible you will need to be on a recognised Masters or doctorate (PhD) course at a British university. Unfortunately, some student accounts are only available to full-time students, so if you’re on a part-time postgraduate course you may have to stick with a normal current account.

We recommend talking to your current bank first to see what they’re able to offer. If that doesn’t work, look through the student bank accounts outlined above to see if you can switch to another student account.

If you don’t do anything, your student account is likely to change to a graduate bank account.

International Students

If you are a student coming to the UK to study, unfortunately you won’t be eligible for an overdraft and most of the added benefits that come with the student accounts reviewed above.

Assuming you are living in the UK for more than six months, you can apply for a basic current account with most UK banks. Otherwise you may be better off with a prepaid card.

Most international student accounts don’t charge a subscription fee and allow you to make cash withdrawals and card payments.

To apply for an account, you will need:

  • Passport
  • Valid visa (if you’re from outside the EU)
  • Student ID or acceptance letter
  • Home bank statement
  • Proof of address in the UK.

Further information

For more help and advice, please see: