How to Manage a Realistic Budget as a University Student
With the cost of living crisis in full force and inflation at a high that has not been seen in decades, being a student is harder than ever. Groceries are more expensive, gas and electric bills have soared, and the price of renting has increased. Maintenance loans are being stretched to their limits, and many students are finding that they no longer have enough to cover their basic expenses.
To ensure that your money goes as far as it can, it is important to create and stick to a budget. This might seem like a daunting task, but is not actually as hard as it may seem! Here, we will lay out the necessary steps for managing a realistic budget as a university student.
First, you will need to create your budget.
1. Determine your income
The first step to creating a realistic budget is to determine your income. This will help to establish exactly how much money there is to account for when drawing up your budget.
To determine your income, you need to work out your sources of revenue. These can include:
- Student maintenance loan. This comes in three instalments; usually close to the start of the academic year, then in January, and then again in April. The size of your maintenance loan is dependent on your household income and living situation. This may or may not be enough to cover your basic living costs.
- Bursaries, scholarships and grants. Some students are eligible for additional financial aid from their university and external organisations. For more information, check out this guide by Save the Student.
- Money from your parents. This depends on your family’s financial situation. Some parents will be able to provide financial support to their child throughout their time at university. If this is the case for you and your parents, you should mutually agree upon the amount that they are willing to give you each week/month/term so that you can factor it into your budget.
- Salary from a job. If you work a part-time job whilst at university, take your salary into account.
- Savings. If you have any savings that you are willing to spend at university, take these into account too.
Do not count your potential overdraft as a source of income. This should only be used in cases of emergency!
2. Estimate your essential outgoings
Once you have determined your income, the next step is to estimate what your essential outgoings total to. Essential outgoings include any expenses which are absolutely necessary. These include:
- Rent. If you are living away from home, rent should be a top priority when creating your budget. Falling behind on rent payments can have real consequences. It is commonly advised that rent should take up no more than around 30% of your monthly budget (although this is not always possible if you live in a more expensive area).
- Bills. This includes gas and electricity, water, broadband, TV licence, and your phone bill.
- Groceries. You need to factor your food shop into your budget. Set aside a realistic total for your weekly or monthly food shop, and try your best to stick to this amount.
- Transport. This includes your bus or train fare, or if you drive, your fuel and car insurance costs.
3. Estimate your non-essential outgoings
Without allocating a portion of your budget to non-essential expenses, you may find that your budget quickly becomes unrealistic and unsustainable. Set money aside for these outgoings, which can include things such as nights out, travel, subscriptions to services like Spotify and Netflix, haircuts and other beauty costs, clothes, or hobbies.
If you aren’t sure on how to estimate non-essential outgoings, UCAS has created this helpful calculator which will create an estimate for you based on the university you attend.
4. Create your budget
Once you’re aware of how much money you have coming in and how much your expenses amount to, you can create your budget.
Decide whether you want to budget on a weekly or monthly basis. You might decide to stick to a monthly budget as bills and rent are generally paid each month, but then you run the risk of going overboard at the start of the month and running out of money too fast. Find out what works best for you.
To create your budget, minus your essential expenses from your total income. This ensures that all essential costs are covered first. Any money left over can be put towards non-essential costs. It is also a good idea to set some money aside for savings. This can be as little as £5 per week; it will build up over time!
Creating a budget is only half of the task; the difficult part is sticking to it! Here are some ways to make sure that you keep within your budget:
Track your expenses
Physically tracking your expenses is a good way to stay on top of your budget. You can create a simple spreadsheet with different spending categories, and compartmentalise your purchases or payments accordingly. There are also free spend tracking apps to help with this, such as Cleo.
By tracking your expenses, you will know exactly where your money is going and can adjust your budget accordingly.
Increase your income
If you find that your budget just isn’t cutting it, it might be worth increasing your income. The easiest way to do this is by finding a part-time job whilst at university. There are often part-time roles for students available in the retail and hospitality sectors. Have a look for openings on websites like Indeed.
If you have a monetisable skill, you could also take on freelancing work using websites like Fiverr. This will allow you to be in control of your own rates and working hours.
Plan and prepare your meals ahead of time
Creating a meal plan will help you to stick to the portion of your budget allocated to groceries. Without a meal plan, it is easy to overbuy and spend your money on food that you don’t need or won’t eat.
Preparing your meals ahead of time is also a great way to save on eating out. Taking a prepared lunch to university rather than buying a meal deal will help you to stick to your budget!
Make use of student discounts
So many companies offer discounted rates for students nowadays! You can find student deals on pretty much anything: food, clothes, travel, leisure activities and more. Making savings wherever you can will help you with sticking to your budget.
Budgeting is really personal, and there is no right or wrong way to do it. Ultimately, you need to find out what works best for you.
If you are struggling with creating or sticking to your budget, there are places to go for assistance. Most universities will have hardship funds and emergency financial aid available should you meet the requirements for it. Student support services may also be able to work with you to draw up a realistic budget.
It could also be worth speaking to your family to see if they are able to provide some level of financial support. This is obviously not a viable option for everyone. Here is some more advice on what to do if your student finance is not sufficient.
We hope this blog helped you to make steps towards creating a realistic budget!
Be sure to check out the Roome website, where we post loads of tips and tricks for university students every single week. Follow us on LinkedIn, Instagram, TikTok and Facebook to learn more about how we’re revolutionising the student housing market!
Posted by Owen Redman
Co-founder of Roome