And we’ve got the solution: budgeting! If you find yourself penniless at the end of every month, it might be time to consider your expenses. We’ve put together a comprehensive guide to help with budgeting for students and trust us, this method will soon be your Holy Grail! Begin by reassessing your costs and building a plan to ensure you have enough saved for that next outing you’re looking forward to. Spending is unavoidable for students, and without prior information, newbies might find budgeting for students way more complicated than it actually is.
What is budgeting?
As a student, budgeting is planning your expenses to ensure you do not end up overspending. It’s sure to help you stretch your income to last until the end of your term. If done right, you will not only have enough funds for your expenses, but you will be able to treat yourself every once in a while.
Benefits of Student Budget
A budget makes it simpler to pay bills on time, accumulate an emergency fund, and save for significant costs like a car or home by keeping track of spending and sticking to a plan. Overall, having a budget gives a person more financial stability for both the short and long term.
How to make a Student Budget
Let’s take a look at the steps you need to follow to create an excellent student budget plan.
Step 1: Establish income
Firstly, you need to determine how much money you can expect at the start of the month. Any money that you obtain can be considered your income.
Common sources of income for students are:
- Scholarships and loans from educational institutions or the government
- Grants and bursaries for students
- Allowance from parents or caretakers
- Salary from a part-time job, if any
Step 2: Estimate expenditure
Now that you’ve jotted down your income, it’s time to list your usual expenses. You can check your bank statement to find the exact amounts or note down estimates for each category. The next step is to classify your expenditures into essential and non-essential.
You’ll probably notice these essential expenses taking up your budget:
- Financial obligations
- Basic necessities
- Supplementary materials for your course
As students discover the leisures of youth, they might try out new things. Any charges incurred for such optional activities will be listed under non-essential expenses. Although non-essential expenses will change based on your lifestyle and preferences, an average student might chart up these:
- Eating out
- Concert/Movie tickets
- Subscriptions like Netflix, Hulu, etc.
- Clothes and beauty products
- Gifts & parties
Simply put, any expenses you cannot avoid will be classified as essential, while the remaining will come under non-essential costs.
Step 3: Calculate weekly budget
Now that you’ve sorted your expenses into two types, you can move on to the next step. Now, don’t be quick to sweat at the sight of maths. Once you’ve got an estimate of your income and expenditure, a simple calculation will give you your budget.
Generally, a budget is calculated every month, but as students tend to splurge at the start of the month, leaving them with little to no money left towards the end, we recommend working out a weekly budget instead. To calculate your weekly budget, simply total your essential expenses and subtract them from your total income. Then, divide by the number of weeks you have in a term.
Formula: Weekly budget = (Total income - essential expenses)/no. of weeks in a term
Step 4: Set goals
The final step of budgeting is dividing your budget among the different categories you expect to spend on. Make sure you begin by setting aside some money to be used only during emergencies. It is finally time to draw up a financial analysis of your non-essential expenses and reassess their importance.
Setting goals is a valuable technique for cutting down on unnecessary expenses. You can aim to reduce your spending habits or increase your savings after identifying the most significant holes in your pocket. You could also look for a part-time job to avoid dropping into the reds.
You could set goals like “Eat out only once a week” if cooking at home is more pocket-friendly for you, or you could pick an affordable canteen plan for your meals.
Budget Plan Example for Students
The best way to understand budgeting for students is to see it put into action! So let’s take a look at a budget plan example for students to use as a guide.
10 Money Saving Tips for Students
Now that you’ve got a hold of the basics of budgeting for students let’s look at some of the money-saving tips students can use to make sure you don’t break the bank.
1. Use the 50-30-20 formula
Most students find it easier to allocate their budget in a 50-30-20 ratio; that is, they assign 50% of their income to essential expenses, 30% to non-essential expenses and the remaining 20% is added to their savings, which they then use to pay off debt, invest in a retirement plan, or out into their emergency fund.
2. Save before you spend
“Do not save what is left after spending, but spend what is left after saving.” - Warren Buffet
Students can set up automatic withdrawals that will transfer the money from their income to their savings account on a specified date.
3. Look for cheaper alternatives
When buying essential items and stationery, buy in bulk to save money. Look for shared accommodation to cut down on rent. Instead of purchasing expensive coursebooks to reference for projects that you might have, join a library near you. For regular coursebooks, opt for used books or digital copies. Compare prices before purchasing to ensure you get the best price.
4. Take advantage of student benefits
Make sure to get your student I.D. as soon as possible, as it opens doors to various student discounts offered by several well-known and trusted websites. We at amber have recently partnered with a range of trusted service providers to help students with their needs, such as flight bookings, finding a roommate, selecting a phone plan and much more.
5. Find ways to increase your income
Money doesn’t grow on trees. But don’t worry, there are plenty of ways to earn money as a student. You can check out the inexhaustive list of money-earning apps available or try out freelancing. You could even look for other part-time jobs like tutoring. If you don’t have enough time to actively work on earning money, you can look into passive income.
6. Try out different transport options
There might be different means of commute available to you. Explore your options and pick the one most convenient for you. Using their I.D., students can avail passes at discounted rates for most public transport.
7. Keep track of your debt
You might spend more than you expected every now and then. Make sure that if borrowing money, you only take what you can pay back at a later time.
8. Get a local bank account
If you’re an international student, the first thing you should do to survive in a new country is to open a bank account. Our experts at amber will guide you when choosing a bank near your destination. Don’t forget to look for banks that provide student benefits and pick one without high fees for foreign bank transactions.
9. Follow through on goals
With a budget plan ready, all you have to do is stick to it. Make it a habit to jot down your expenses at the end of the day. It’s easier to keep track of your spending if you update your expenditure regularly. At the end of the week, analyse your spending and modify your next plan accordingly.
10. Stay on track with your rent
Keeping track of your rent on top of your monthly bills and tuition fees can make managing finances quite stressful for a student. It is vital to take note of your lease’s terms and conditions as some require annual payments while others collect rent on a weekly or monthly basis. When booking accommodation with amber, we will ensure you clearly understand your lease’s terms and do not face any issues with your rent. Our all-inclusive rent provides a hassle-free process for students.
Student Budgeting Tools
The world is going digital and so is budgeting for students! With several money-tracking, money-earning apps available on the market, budgeting for students has never been easier! If you’re a newbie to budgeting for students, you’ll be glad to know that there are several tools online that help with budgeting for students.
1. UCAS Budget Calculator
That’s right! You can find an official budget calculator right on UCAS’ website. This app offers a quick solution to your budgeting woes by calculating monthly incomes and expenditures in a few seconds, based on just your university.
2. This is Money
A detailed budget calculator, This is Money helps you understand whether you have enough money to cover your expenses for each year of your course.
Goodbudget follows a classic method, called envelope budgeting for students to improve their saving habits. It divides the budget into separate envelopes for each expense to ensure you don’t go overboard on spending.
4. Money Dashboard
Acting as a money-tracker as well as a budget-calculator, Money Dashboard lets you set target spending goals for various expense categories and helps you see a predicted income, expenditure as well as balance (with colorful pie charts!).
5. Money Lover
A useful tool that you can use across all your devices, Money Lover allows you to track your daily spending and also notifies of any upcoming recurring bills.
If you’d like to know more about money saving apps to find the one that’s perfect for you and your financial goals, check out our blog on the best money saving apps which will surely help loads with budgeting for students!
Money, money, money, must be funny in a rich man’s world but it certainly isn’t this one. With the help of a student budget, you’ll never have to worry about dipping into the red again. Surprisingly, budgeting for students is just one of several ways of managing one’s finances better! You can also go through these tips on how to get out of bad debts in our webstory.