Student loans: how to get by on a budget
Finally, the moment you've been waiting for has arrived - your student loan has just reached your bank account. It’s an incredible feeling of relief if you’ve been waiting for the money to arrive so you can pay off your overdraft from the first term, or if you’ve generally just been short of cash for the past few weeks.
This is the reality for the majority of students living across the UK, and may be the case for you. The student finance site, Save The Student, found in their National Student Money Survey 2016 that 80% of students recorded that they ‘worry about having enough cash to get by’. Even with a lump sum of money like a student loan, it can be difficult to know how to save because you have rent, books, phone bills, travel expenses and the fun stuff to pay for. Let’s be honest, most students will having nothing left by their next payment in May.
So, how can you avoid this? Here’s one top tip every student can use to prevent going into that overdraft…
Create a budget!
This is so important. An easy way to do this is to make a spreadsheet for yourself and work out how much money you have each month until your next loan payout. For example, if you get a £2,000 loan in January, and your next loan is paid to you in May, this would leave you with £500 per month to live off. You can break this down further; take off your monthly spending on things like bus/train fare, rent and phone bills. You can then divide this total amount by the amount of weeks within the month, and it would leave you with your weekly spending on things like food and socialising.
This budgeting plan can be really helpful; you can still enjoy your newfound freedom with your friends and all that student life brings, while understanding how far your budget will stretch. UCAS reports that ‘budgeting can be key when it comes to keeping tabs on your money, so you know exactly what’s coming in and what’s going out’.
There are lots of great ways of saving whilst you study, these can include:
- Buying second-hand textbooks instead of more expensive brand-new copies
- Searching for cheaper deals on phone bills, food vouchers, and finding student discounts
- Looking to see if your university has any deals or freebies that they’re giving away – universities value your opinion and your student’s union can often run discussion groups or surveys on how to make student life better, in exchange for vouchers
- Choosing your student bank with a reward that would suit you; for example, Santander offers a 16-25 railcard, saving you a third on certain rail travel, which can be beneficial if you live at home and commute to your place of study, or if you live away and like to return to your home comforts
- Finding a part-time job at university that would suit your timetable and schedule, whilst still leaving time for studying
- Finding the cheapest place to buy your weekly food shop – you can go online and compare whether your food will cost less at an alternative supermarket
- If you live away from home, find out whether accommodation is cheaper on the outskirts of your university town or city; it maybe cheaper to commute into lectures than to live in more expensive, centrally located accommodation
There is further support available for you with Christians Against Poverty. The CAP Money Course is free to join, you don’t have to be a Christian, and it gives you the skills to have a focused plan and weekly budget, preventing debt and using your overdraft. One in four students surveyed in the National Student’s Money Survey admitted that they’d ‘never budgeted before in their lives’ so this course is an essential tool. You can find your nearest course here.
Spending time studying, often living away from home for the first time, is an amazing opportunity. By keeping a careful watch on your budget, you can still have a great time and develop some great life skills for when you start to earn a salary. If you're worried that your debt is becoming unmanageable, don't keep it to yourself. Talk to your parents, your personal tutor or give CAP a call. We're here to help.