This is your new student budget. Stick to it!
Student loans are your first taste of being an adult.
With a large chunk of money comes the freedom of how you can spend it. So how can you ensure you don’t blow it all on one go?
Whether you’re still living at home or in student accommodation, the idea of having a large sum of money is both an exciting yet daunting feeling.
This is perhaps the first time many students have had such a large sum of money at their disposal.
Most students spend their first batch of student loan on the social aspect of university such as nights out, movies, dinners, even a brand new seasonal wardrobe.
All of these expenditures eventually tally up, leaving some students out of money by the first few weeks of getting their loan.
Budgeting is something that is encouraged to help manage your money better. Here are some simple, yet effective ways on how to budget your student loan.
1. Create a Budget
Add up all of your income and all your costs, by creating two columns: ‘Incoming Money’ and ‘Outgoing Costs’.
The first column will include will include your student loan (such as maintenance loan), any grants, bursaries, and scholarships. Money from parents and jobs should be included too.
For the second column write down all your expected expenditure. This is anything and everything, from fees to rent to entertainment.
Tally up both columns and this should give you a rough idea of how much you have and how you can split it up across the semester or the year as necessary.
The UCAS student calculator is a great tool to use to work out how you should split your money up fairly and not run out too quickly.
Congratulations, this is your new student budget. Stick to it!
2. Make your Essential Outgoings a Priority
This really is a no brainer. Student loans are there for a reason – to cover any big costs that you might not otherwise be able to afford while studying.
The essential outgoings will be things that you have to pay and are necessities. This will include your tuition fees, bills, accommodation, travel costs and food. They are your main priority once you get your student loan.
After paying essential outgoings, most students are usually low on money at this point. But if you are realistic, and plan your outgoings carefully, you might be surprised that you could potentially have more money left over than you think.
3. Note Down your Spending
Whether it’s through creating a spreadsheet, getting an app, or just writing it down, taking notes of your spending habits can show you how much you’re spending on a daily basis and what exactly you are spending it on.
Once you know how much you are realistically spending, you can reassess your budget and move money around to accommodate it.
Remember don’t live from loan instalment to loan instalment, work out ways to cut down on your daily spend so you have a little left over for rainy days and special occasions.
4. Avoid Temptation
Sometimes when you know that you have money, you are tempted to buy things based on rash decisions.
For example, a swanky top-line £2k Apple computer. Or a £5k car so you don’t have to rely on tedious public transport. Or a £300 long-weekend ‘budget’ holiday.
‘Do I really, my life totally depends on it, need it?’ is a question that you should definitely ask yourself before you buy anything that could in any way break the bank, leading you to taking out credit cards or extending your overdraft. Be realistic!
5. Treat Yourself
Budgeting doesn’t mean that you can’t spend your money on luxuries or fun things. There’s nothing wrong with treating yourself every now and again.
Of course, you can buy clothes, go on nights out and eat out, but these should be done in moderation.
One good way is to keep a contingency budget aside for birthdays, big events, concerts and nights out where you know you will need a lot of money. That way you won’t feel too bad about spending.
Additionally, take full advantage of student discounts as much as possible. Always find out if there are any special discounts on offer for students before paying full price.
Invest in an NUS student card that you can use anywhere including online, and a 16-25 railcard that will give you a third off all your travelling costs.
Remember a loan is still a loan. You don’t want to finish university and spend your first day of unemployment neck-high in student debt. Especially, if you know it will take a few months to get a job.
A student loan is a term that is associated with debt. Using these tips to budget your loan effectively will ease the worry of money issues and help you feel more in control and confident with your money.