It can be a confusing and daunting experience leaving home for the first time. One of the biggest challenges will be keeping on top of money issues. Starting the term with a plan and realistic budget will help keep a lid on unnecessary spending and prevent freshers burning through their student loan and overdraft before Christmas.
How to make a student budget
Assuming that your fees are already paid, here's a plan of action:
- Work out what's available to spend (loans, grants, income from job etc.)
- Work out likely costs (prioritise necessities)
- Put a weekly cap on certain types of spending (nights out, takeaways etc.)
- Keep tabs as you go (use bank statements as a tool to help)
Work out spending
For a teenager heading off for his or her first year, working out the costs is a little tricky. For that reason, we’ve tried to come up with a very basic guide to spending to give you a rough idea. Adjust the figures and experiment for yourself using our budget calculator.
Rent: If living in halls, check the university prospectus for details because bills are often included. The average student spends £120 -£180 each week on accommodation.
Eating out: £8.45, alcohol: £6.85, going out: £6.65, buying clothes: £7.35, transport home: £5.78.
Try not to forget the little extras, looking at everything you are likely to buy in a week, factoring in the costs of laundry, toiletries and movie subscriptions.
It is also a good idea to build up a contingency fund for one-off extras or purchases you will likely have to make just a few times a term rather than weekly such as course books, any other course-related equipment, excursions, stationary, printing / photocopying and club memberships.
Top five tips
1. Strike the right balance.
Don’t make your budget so tight that you feel constrained because then you’re more likely to swing over and go into a spending binge.
2. Be your own person
If you’re with a group of people who are going out and flashing the cash, you don’t have to do it. When you start running out of money or you fell under pressure, just say that you're a little short. I guarantee you someone else among your friends will feel the same way and will appreciate you having drawn a line in the sand on the spending.
3. Live like a student
As a student you get specialist banking services, discounts at stores, cards and vouchers that give you discounts. Use them all because it increases the spending power of your money.
4. Be savvy
Read the details of your overdraft, your bank account, any credit cards you have so that you can find the deal that’s most suitable to you.
5. Be cash happy
When you go out at night with friends, put only the amount of cash in your wallet that you can afford to spend.