How to make a budget at university -- and how to stick to it!
So, you know exactly what your income at university will be after reading Part One of this series on Managing Your Finances At University.
But what about your spending? How much do most students spend at university? And how do you draw up a budget anyway?
Spending
It will vary from place to place and person to person, but here’s a breakdown of what the average student spent his/her money on last year, according to the National Union of Students (NUS) and HSBC:
Item | Expected Weekly Spend | Actual Spend |
|---|
Books | £8.77 | £9.40 |
Equipment | £8.34 | £8.04 |
Field trips | £7.93 | £6.74 |
Groceries | £21.24 | £29.52 |
Rent | £79.25 | £75.47 |
Other bills | £24.32 | £30.82 |
Socialising | £23.92 | £28.15 |
Daily/routine travel | £11.85 | £16.04 |
TOTAL | £185.62 | £204.62 |
As you can see, students underestimated their spending by nearly £20 a week. That’s almost £1,500 over the term of a three-year course. So, when you are calculating your budget, do try to cut yourself a bit of slack if you can.
Budgeting
In a nutshell, budgeting is adding up your income and deducting your expenses. It helps if you work out a budget for the whole year and another one on a monthly (or even weekly) basis. To do a monthly or weekly budget, you set aside money for food, travel, entertainment and so on. You also break down your big annual expenses, such as holidays and car maintenance, into manageable amounts. Hence, you can save up for your big purchases.
When people are in serious debt, we recommend they do a Statement Of Affairs (SOA), which is a comprehensive list of all their income and expenditure. Anyone living on a low income - which means most students - should do one too. It's a great place to start with your budget, so that you don't forget something important.
And it's so easy to forget things! Tuition fees, rent, fuel bills, travel expenses, books and course materials, insurance premiums (such as for car and home contents cover), mobile and other phone calls, food, leisure and entertainment, clothes and laundry bills...The list is endless!
To get you started on the road to good financial habits, keep a spending diary. To do this, you carry a pen and a notepad around with you. You write down the amount of money you have spare for the month (or week) and, whenever you have a spare minute, you update the diary with any expenses you've made. OK, so your parents don't do this, but they probably don't need to count the pennies quite as much as you!
The Golden Rule
The golden rule of student budgeting is: the less you owe at the end of your boozing days, the quicker you'll be able to start saving and investing, getting on the property ladder, and buying things with your own money. Trust me, it's the route to a happy life!
More in our Student Special series: Managing Your Finances At University (Part One) | Students: Reduce Your Bills! | My Five Top Student Bank Accounts | The Debt All Students Should Avoid | Keep Your Stuff Safe At University | Money Saving Tips For Students | Money Talk Podcast: Everything Students Need To Know About Money
> Compare student bank accounts at Fool.co.uk
