Managing Your Money


As a student, managing your day-to-day budget and living expenses can be an unfamiliar task - but that doesn't mean it has to be daunting!


For many students managing a budget is a new and unique task, particularly on a limited income that is paid in instalments.


This can be a shock to the system, especially if this is the first time you have lived away from home. Although managing a budget can be as difficult for a third year student as it is for a fresher.


It's important that you manage your money effectively so that your financial situation does not impact on your studies or your wellbeing. Below we have our essential, advisable and optional guidance to help you with this.


Take a look at our top tips to help you manage your money.





1.    Budget

A budget is a financial plan that helps you to manage your money and track your spending. Using a budget, you can estimate what disposable income you have, and make informed buying decisions.


        Why should I budget?


Budgeting helps you keep track of your finances, and safeguards your financial decisions. If you budget well and plan your month effectively, you may be more able live comfortably, as well as take part in those recreational activities you have on your bucket list.


If you choose not to budget your money, you are more likely to make problematic spending decisions that could lead to financial hardship or debt.


Budgeting does not mean that you have to say no to spontaneous plans or return significant purchases – it just means that you are more prepared when occasions arise and are able to spend sensibly, knowing your financial limits. You might even be able to save some money for a rainy day!


If you often find that you worry about your money, budgeting is great way give you some peace of mind.


        How can I set up a budget?


  • First, you need to decide on the period of time that you are budgeting for. It might be easier to manage a monthly budget to start with, but if you only receive income once a semester, then this time frame may be more applicable to you.

  • Calculate how much money you receive in this time period. This may include, but is not limited to:
    • Student Finance
    • Income from family members
    • Paid work
    • Sponsorship, bursaries or funding

  • Next, you need to estimate how much money you tend to spend on essentials. ‘Essentials’ might include:

    • Rent or mortgage
    • Household bills – water, gas, electricity – and what about wifi or your TV Licence?
    • Living costs – food, maybe a mobile phone contract?
    • Studying – do you need any equipment, or resources to help you?
    • Travel – Commuting costs to University or a part-time job?
    • Leisure – gym membership? Date night? Do you have any annual leave coming up?

  • Calculate your net income – this is the amount you have left over when your bills are paid. To do this, deduct  your essential outgoings from your income and find out how much disposable income you may have left over. This money is not earmarked for your essential outgoings, and can be put towards extracurricular activities, savings, or perhaps those trainers you have your eye on.

    If you find that you are spending more than you have coming in, you may need to work out where you can cut back.

    If you are unable to cut back the University may be able to offer you some financial support. You can find out more about this here.

    Remember to keep track of your disposable income - Once it’s gone its gone! Have a look at some of our tips below, to help you monitor this money.


          What else do I need to consider?


  • If you’re struggling, Citizen’s Advice has a budgeting tool to help you work out your costs which might be worth a look!


  • Have you heard of the 50/30/20 rule? 

    This isn’t for everyone, and may not suit you and your situation, however, as a rough guide you could try this:
  1. Budget 50% of your income for monthly ‘essentials’
  2. Budget 30% of your income on ‘wants’ – E.g. those trainers, or a round of VKs
  3. Budget 20% of your income for a savings fund





2.    Have a Plan – and stick to it! 


After you’ve calculated how much disposable income you’ve got, it’s good to make a plan so that you can monitor money as you spend. It’s good to align your priorities with your spending habits – are you a gym buff? A foodie? You may want to accommodate for this in your plan, but it is good to set a limit – and stick to it.

Are you someone that enjoys an iced coffee before work? These small purchases build up over time. Make sure that you accommodate this in your plan, or monitor the purchases as you go. You might want to use this disposable income to save for a bigger purchase, such as a summer holiday, or a car. In which case, you can use the plan to ensure that you can afford this in due course. 

Once you’ve established your plan, it is good to persevere for the first month or two before making any changes or disregarding it altogether. If you are saving for a bigger purchase, try to keep this goal in the periphery of your mind, to refrain from indulging in any bad spending habits!


3.    Don’t commit to new monthly bills


It’s not unusual to be tempted by new programme subscriptions, music streaming sites or the latest mobile phone. But where possible, it is good to refrain from these financial commitments. Even ten pound a month can add up to £120 in a year so it’s always good to do a cost benefit analysis before committing to a financial contract or new monthly bills.

A cost benefit analysis does not have to take hours, its merely a consideration of the cost of the item you are committing to, and the benefit you may get from the product or service. 


         Thinking of taking out a loan?


Remember, the bank does not calculate how much they can lend you based on what you can afford – they only know your income as you’ve reported it, not your expenditure. We would strongly advise you to ensure that you can afford a new monthly bill within your budget, before committing to a bank loan.


4.    Expect Emergencies - Make a bills calendar 


You never know what is around the corner. Maybe your job is at risk, your student income might be delayed or your electricity bill is higher than you expected this month. It is better to be prepared.

One way to do this is to save some money where you can. Maybe you could put your birthday money to one side, or your tips from your part time job, or budget in some savings every month, but this could help keep your head above water in the face of a financial emergency.

To prevent any surprises we would recommend making a bills calendar, that helps you keep track of what expenses you have coming up and helps you stay on top of your payments.


        What happens if I don’t pay my bills?

Late payment of bills could incur additional charges.

Failure to pay bills altogether could resort in legal action against you, bankruptcy, or having your heating and electricity cut off if you haven’t paid your energy bills.

If you receive a late payment letter, do not ignore it. This could affect your credit score and incur additional charges which could escalate your problem. If you have received a late payment letter and you are unsure on what to do, feel free to contact us for advice.


        How can I make a bills calendar?


It’s easy!

  1. Make a chronological list of each monthly, semester, or annual bills you are required to pay.
  2. Note down the date they are due.
  3. Review the list once a week, and tick off the bills as they are due and paid off.


5.    Don’t neglect your bank!


It is always good to ensure that your contact details are up to date on your bank accounts. Your bank accounts may send you updates about their policies, interest rates and your accounts via the post. It is good to be aware of these changes, and the effect they may have on you. 

If you are aware of changes, but are unsure about how they will impact you, it may be possible for you to drop into your local bank branch, or to book an appointment to discuss any changes or concerns in person.





6.    Have a limit on unbudgeted spending


After working out your budget, you know how much money you have left over for non-essential purchases. It’s good to have an upper-limit on the money that you are willing and able to spend with this net income, to prevent you from overspending or struggling later in the term.


7.    Use Cash


Contactless cards and Apple Pay are making it increasingly simple to spend money without even thinking about it. 

Once you have a clear idea of how much disposable income you have to spend, you could get cash out at your local ATM and use this for all your non-essential purchases. This may help you to be more vigilant with your spending as you can visibly notice your expenditure.

If this is something that you are considering, be careful to store your cash in a safe place. We would strongly advise that you invest in a wallet or purse to ensure your money is safe. If you lose your cash, it can be very hard, and often impossible, to relocate.


8.    Don’t go for the big blow out - Save up for bigger purchases


It’s not unusual to be tempted by the latest fashion or technology, but these things are always around the corner. Take your time making these big purchasing decisions – you might decide that this isn’t as necessary as you first thought.

Additionally, if you are unable to afford the item in the first instance, there may be added benefits to delaying the purchase; if you decide to pay using credit, you may incur extra charges owing to interest on the purchase.

Also, we would strongly advise you to avoid skipping your essential payments to treat yourself to bigger purchases – please see what can happen when you don’t pay your bills above (4)!


9.    Make sure you’re paying the best prices


Have a look at price comparison websites before committing to any purchases. 

Are you setting up your bills? Choosing a broadband package? Maybe your car insurance is due? Make sure that you have the best deal on the market. Please note, the company that delivers the best deal may change day by day, so it’s a good idea to keep your eye out for new deals before renewing your packages.

Additionally, as a student, you may be able to get a better price on the smaller things too! Check out our Student Discount advice here.


10.    Sell your scrap


If you’re surrounded by things that you no longer want or need, you could try to sell them. There are plenty of internet platforms that you can use to sell your items. If you’re in need of cash, this might be an easy activity to reap some extra pocket money.