Life at university offers plenty of new experiences: a new course, new friends and living on your own for the first time.
Meanwhile, your bank account is experiencing another first – your loan payment. This may be the largest lump sum you’ve ever received, so it can be temping to start spending. However, if you’re going to stay out of financial trouble at university, you’ll need to make it last all term, and learn to spread your student living costs.
There are ten steps that can make all the difference.
1. Set a budget
Think of a budget in the same way as your course. You can’t crash headlong into it, you need to do the work first. Start with the background research, then set out a plan – and stick to it. It’s not fun, but then again neither are most of your essays: it just has to be done.
Work out your income for the term: your student loan, any earnings from a part-time job, plus grants or scholarships. Then deduct the cost of your accommodation. Price up the cost of the books, travel costs and any other unavoidable spending. Don’t forget that you’ll need to travel home, and pay for one-offs like Christmas and a summer holiday. Then divide the amount you have left by the number of weeks in your term – and that’s your weekly budget.
2. remove temptation
If your whole term’s budget is too easily accessed, it’ll be equally easily spent. First choose a good current account – check out details such as overdraft limits and charges, rather than being swayed by free gifts. Then find a decent easy-access savings account. You can then set up a direct debit for weekly payments from this into your current account. Put any one-off windfalls – like birthday present money – into your savings account as well.
3. spend wisely
New students can struggle to sacrifice things completely: nobody wants to stay home during Freshers’ Week eating beans from the can. If you can’t cut things out, you need to make your spending more cunning. There are an enormous number of student deals on offer. We have put together a list of brilliant student bargains. You can also save a small fortune on food and drink if you learn how to shop more carefully. We’ve also got a handy guide on cheap food for students, although by far the best investment in saving money is to learn to cook a few things from scratch.
4. Make frugality a habit
Before you spend money on anything, you should automatically be asking yourself whether you could get the same thing cheaper elsewhere. One of the classics is coursebooks. An astonishing number of students get their reading list, and go straight to the bookshop. For those books you only need for a short time, head straight from the lecture hall to the library. It’s the only way to be sure you’ll get your hands on them first.
For those you’ll need all term, it’s worth considering whether you can get any of them secondhand. Try Amazon, abebooks, and alibris for second hand bargains. Check whether there are any book sales on campus, and don’t be afraid to ask your tutors for tips on cheaper books. Some texts change each year, which makes this trickier, but you should never pay full price for a 19th century novel or a classic history text. Check out our guide to student finances for more handy tips on frugal habits.
5. don’t forget the holidays
Take into account that you’ll need some spending money in the holidays, too, even if you’re returning to your parents’ house. Plan in advance for the holidays, and don’t leave it until the last minute to try to find a Christmas or summer holiday job.
6. Keep track
By far the best way to keep track is with a spending diary – either online or on paper. We have a guide to help you start a spending diary.
You also need to set up an overspending safety net. Internet-based accounts make it easier to keep track of the money going into your account – and coming out. If your bank offers it for free, sign up for alerts to warn you when you’re about to go into the red.
7. learn when to say no
There are times when things will go wrong. We’ve put together a handy guide on common student money problems, and what to do about them. Nobody expects students to be perfect money managers, but if you are honest with yourself, and keep track of your spending, you’ll know in advance when trouble is lurking.
If you’re running low on funds, then you have to learn to say no. Your friendship will not hinge on you going to an expensive gig or festival. In fact, if you’re honest about what you can’t afford, you’ll be surprised how many people are in the same boat.
8. Use credit carefully
Nobody expects you to avoid credit altogether. If you are prepared to be disciplined about your spending and repayments, a credit card can help you spread your student living costs. They can also be useful for larger purchases such as books, train tickets for long journeys, or necessary electronic items. To help build a positive credit history, you could get a simple credit builder card with sensible credit limits.
Whatever you do, make sure to look around for the top credit card deals, and make sure that you are fully aware of the penalties for running up too much debt on credit cards before you sign up to any agreements. As a student it can be tricky to find an appropriate credit card, so check your eligibility before applying.
Of course, a credit card isn’t the right answer for everyone. You’ll be charged interest if you don’t pay off your balance in full each month (or within the 0% period). Some people don’t have the discipline to keep credit under control, so for them, a card could prove an expensive mistake. If you feel your debts are getting away from you, check out our guide on coping with debt as a student.
9. Remember, there’s no safety in numbers
It’s easy to assume that all students run up huge debts – including credit card debts. That doesn’t mean you can assume the approach is OK for you too. There will always be someone who is spending more than you, accumulating bigger debts, and still going out. However, they will face the consequences eventually. The key is not to follow their example, and end up in the same deep, dark hole of debt. Make your own plans, and stick to them.
10. consider the money coming in too
Spending is only half the story. You also need to consider how to boost the amount of cash you have coming in. We have a whole section of the website devoted to clever ways to make extra cash on the side. It’s also worth checking out our guide to making money as a student, and 14 ways you can make money at university.