When I titled this as ‘student budgeting’, I did have to snigger a little. Budgeting as a student is always going to be difficult!
It might not be easy to budget as a student, when income is always particularly low. However, it really is beneficial to have a clear idea of where your money is going, and how much you can realistically afford to spend. Half an hour of your time will see you through a more than adequate idea of your monthly budget, and from then on it’s a lot easier to just add an item to your outgoings or to your income, and the main work of your budgeting for each month is already done.
To get a realistic idea of your budget, you need to have a good look at bank statements and receipts for the last month. Try and think of your daily routine. Do you buy the odd coffee or newspaper on the way to uni? Do you give change to the homeless man on the street? What about that trip you sometimes make to visit an auntie, do you buy a bus ticket for that? Take a note of all the things you need to spend money on each month. There are a lot of templates online if you do a search, and I’d be more than happy to provide my own template if anybody would like. My expenditure each month usually looks a bit like this:
Remember to include things like electrical bills, tv licence, travel and food. I live in catered accommodation and so my bills and food are covered under my rent.
I think it’s really important to save some money for an emergency every month, because you just never know when you might need it. I have a friend who had put money into a pot for about 5 months, and then found out she was no longer eligible for her student loan. Luckily, she’d saved about £400 in a money pot, and we took great pleasure in helping her smash it to retrieve the money! Lesson learnt – always put aside money for an emergency.
The hardest bit is over, once you’ve worked out where your money goes every month and taken a note of it. I like to use an excel sheet, (but any spreadsheet, or even pen and paper will do) and have my bank balance in the top left corner cell. Next, have your income for that month underneath that cell. Underneath, in a new cell, you can use a simple formula ( =SUM(A1,A2) for Microsoft Excel 2010) and this will be your new balance for the month to come. (This is what you now have to live off for the month!)
In the centre of your spreadsheet, put a list of all your estimated expenditure for the month. (I have another column beside my est. expenditure, where I can tick these off as I buy/pay for each item every month, so I have an actual expenditure tally too) Tally the sum of your estimated expenditure using another formula. If you’re not familiar with the formulas, they’re very easy to find online with a quick web search.
On the bottom right of your screen, take your expenditure off your balance for the month. If you are not in the minus – well done! Your spending is well within your limits! However, if it is in the minus, it’s time to go back and look at what you can really afford each month, or whether or not you need to think about taking on a part time job.
Are you spending too much on nights out? Magazines? Music? Whatever it is, there has to be a cutback somewhere, and it’s for you to decide where the cuts should be. Quite often, our money is being spent on small things, where the cost builds up over weeks. Take a coffee for example, 5 days a week, at £1.50. In one week this amounts to £7.50, which amounts to £30 in one month, and about £360 in a year! That £360 could be put to much better use somewhere else, were you to decide to make your own coffee in a travel cup everyday. If you need some de-motivation, take a look at Martin Lewis’ de-motivator, where he does the math for you!
Having taken a closer look at your finances, you should be in a better position now at the beginning of each month to be able to say no to that £10 takeaway, and make a £3 home cooked meal instead! If you have any more thoughts or ideas on student budgeting, please say so and let me know in a comment. Good luck! And remember, a half hour now could save you stress for the rest of the month!