The ultimate guide to student budgeting

Budgeting is simply making a plan for your money, or to put it another way, ​‘budgeting is telling your money where to go rather than wondering where it went.’ — John Maxwell

Budgeting is about setting goals, having more control of your money by becoming more aware of your spending habits, and identifying areas where you can cut back. It’s about managing the money that you do have to make it last as long as possible.

Probably for the first time in your life, you’re going to have a lot of money hit your bank account; it’s really easy to lose track of where your money is going.

To start your student budgeting journey, think about your ​‘why.’ What are your financial goals? It could be that you just want to ​‘survive the year’. Or maybe it’s about saving for a trip abroad or building up your emergency fund.

1. Gather paperwork/​emails relating to income and expenditure, e.g. confirmation of your student loan or rent costs
2. Work out your income
3. Look at your expenditure

Income sources while at university may include student loans, scholarships or bursaries, part-time jobs, or financial support from your family. 

If you meet certain criteria, you may also be eligible for additional funding beyond maintenance and tuition fee loans. These can range from disability grants to hardship funds.

A question you need to ask yourself is, ​‘is this income going to be sufficient to cover my spending?’

You need to look at how much you’re spending and what you’re spending your money on each month. You might not have any idea, but here’s an example of an average student’s monthly budget to get you thinking. 

*London would be much higher

Source: National Student Money Survey — Save The Student

Once you’ve worked out your student budget, you can try and find ways to maximise your income. You might think about getting a part-time job. It’s important to still have a good work-life balance, as you don’t want a job to negatively impact your studies. 

There are also some short-term things you can do for some extra cash, like selling unwanted clothes or other items that you no longer need. Vinted or Facebook Marketplace can be great for this!

Think about what’s essential vs what’s optional. There’ll be some obvious ones, such as rent and food, but what’s optional is different for every student; what’s optional to you, could be essential to someone else. 

1. Cut costs — do it cheaper

When it comes to food shopping, many supermarkets have great discounts that are only available if you have the loyalty card e.g. Tesco Clubcard, Sainsbury Nectar, or Lidl Plus. If you use those stores, don’t go shopping without the app or card. The convenience store closest to your university halls may be more expensive compared to walking ten minutes further to a bigger supermarket—you’re paying for convenience.

Take advantage of student discounts, but use them sparingly—they’re giving you discounts to get you to spend more! Also, many places such as barbers will offer a student discount, and if they don’t advertise it, ask! 

Do you use the train a lot? Why not buy a young person’s railcard or split train tickets? You could save more money, especially if you’re travelling back home regularly.

Buy second hand. Vinted, Facebook Marketplace, and charity shops are all great places to find everything from clothes to household items. 

2. Cut back — do it less

Really, only you can decide what you will cut back on. Looking at your spending on a weekly basis and seeing where there are opportunities to spend less on those things is often the best way to go.

Do you pick up coffees regularly or have takeaways? Why not cut a few out per month and watch the money you save add up?

3. Cut out — just don’t do it

Have you stopped using that gym membership or Disney+ subscription? Cut it out. 

Martin Lewis (Journalist, Money Savings Expert and presenter of the ITV’s Money Show) has this mantra:

You’ll need three bank accounts. Like different foods that go in the cupboard, the fridge or the freezer, you’ll need to separate out your spending to make it easier to manage. It might be bank accounts that you have already, but you might also want to set up a new student account. 

This is where you’ll receive all your income (e.g. maintenance loan, parental contributions, or work earnings), and where you’ll pay any monthly or termly bills from. 

This is where you’ll keep your money for your usual weekly expenditure, such as food shopping or leisure activities. You may want to set up a regular standing order (a regular payment of the same amount that’s paid on a certain date) from account one to account two, so that you won’t spend more than you can afford. 

Keep your savings separate from your weekly spending. You may want two of these accounts to separate out long-term savings goals from short-term savings, like money for Christmas or a student union/​social event. 

Breaking your phone or having other unexpected repairs aren’t just annoying: they can cause real financial (and life) stress. That’s why having savings in an emergency fund can give you a financial safety net for those moments when you need it the most.

Here are seven top tips from those who’ve been to university to help you learn how to budget as a student: 

1. ‘It was a complete shock just how much accommodation costs —my loan didn’t even cover my hall fees in my first year.’
2. ‘Have a plan for the full year —when are the spending peaks, like the upfront costs of joining a sports club?’
3. ‘Have some money set aside for unexpected costs, like replacing something that breaks or extra social events.’
4. ‘When will you need to pay a deposit for your following year’s accommodation? That’ll have to come out of this year’s budget.’
5. ‘Laundry—it shocked me how much it costs for a wash and dry! Cut back on how much washing you do (and hand wash some smaller items).’
6. ‘Meal prepping is a real money saver, especially if you play a sport or have deadlines looming, as there’s less chance of ordering a takeaway.’
7. ‘Put in time for regular budget checks. Look at how you’re tracking with your spending and make changes if needed. If you’ve got time to binge-watch Bridgerton, you’ve got time to budget.
   

Talking about money isn’t always the easiest subject to navigate, but there are definitely less comfortable ones!

If you’ve never talked about money and budgeting with your parents or guardians, you need to start now. Are they giving you a parental contribution to cover your costs? If they are, how much will it be and how often? Ask them to pay it into account one we mentioned earlier (where all the income goes).

What about your friends—the new ones you’ll make and the ones you might end up sharing a home with? They could have different levels of income, different spending habits, or different opinions of what they see as essential or optional. You need to have honest conversations, especially around costs that are shared. 

Like anything, student budgeting is a skill that can be developed over time. Ultimately, budgeting helps you gain insight into your spending habits, so you can start to budget like a boss, better manage your finances, and live a fulfilling life.

At CAP, we want to equip you with the skills to manage your money at university. Join a money coaching session today to learn more about budgeting and find ways to take control of your finances to prevent debt. You’ll even have access to online, interactive budgeting tools to support you at university. The best part? It’s free, and you don’t need to be a Christian to sign up. 

Don’t forget that you can also download our free budgeting worksheet to help you budget like a boss!

About the author:

Alison has been a money coach with Christians Against Poverty for twelve years. She’s also supported three children through university — two graduated, and one starting second year in September. Many of the real-life examples come from talking to them and their friends.