How to Budget What is a budget? “A plan to show how much money a person will earn and how much they will need or be able to spend” Budgeting involves calculating how much income you have, how long it needs to last for and what costs you have to meet. Four things to remember: Why should I make a budget? In order to know what you can afford, you need to know what you have got! You won’t get to the end of term/year having run out of money Financial worries can be a massive cause of stress and anxiety for students Work out your priorities Maximise your income Minimise your expenditure Stick to it!
Debt is normal for students, but effective budgeting will minimise your future debt. Five steps to a brilliant budget Step 1: Calculate your income: student loan, part time work, parental contribution… Step 2: Work out your income for weekly or monthly amounts – this is how much you will have to cover all your costs during this period. Step 3: Deduct your “fixed” expenditure (rent, tuition fees). Step 4: Work out your priority “variable” expenditure (food, transport, course costs, health). Step 5: What you have left is for non priority costs (socialising, luxuries). …and breathe – your budget is complete! Ways to maximise your income Part time or holiday work – make sure you are not working more than 15 hours a week during term time, else you may find it hinders your study. Remember: you’re at university to get a degree, not a part time job! Parents – some students’ parents contribute financially to their university life, where as some students wish to be totally independent. Sponsorship – less popular nowadays, however the army still offers good sponsorship opportunities University/College – bursaries, scholarships, Access to Learning Fund, Disabled Students Allowances
Finally…some budgeting tips
1) Work out your budget to get an idea of your cash-flow situation as soon as possible (preferably before you go to university). 2) Economise right from the start. If you spend lots of money at the start of the term you will end up broke and miserable by the end! 3) If you can't afford what you need, don't buy anything you don't need! Things like paying rent on time and having food to eat are more important than anything else. 4) Keep your budget under regular review and make adjustments for any costs you may have miscalculated. 5) During a 'typical' week, keep a record of everything you buy and how much it costs. Cheque stubs, receipts and bank statements can all help you draw up a comprehensive record of total expenditure. This will help you to revise your budget and make it more realistic. 6) Only have the heating on when you really need - even in winter just a few hours in the morning and a few hours at night will see you through. Other energy-saving rules: Have showers instead of baths, always turn the light off when leaving an empty room, only fill the kettle as much as you need to, don't leave the telly on standby.
7) Share cooking and shopping with housemates and split the bills. 8) Buy fruit and vegetables from market stalls and not the supermarket - it will be a lot cheaper. 9) If you need a haircut find your nearest hairdresser and ask if they need any models. This will be a lot cheaper than normal or even better…FREE!!! 10) Check out 'cheap' shops such as 'Poundland' and 'Wilkinson's'. You can get all sorts of necessities in there such as household cleaning products, shampoo, light bulbs and a whole host of other items really cheaply. 11) Make calls and surf the net during off-peak times only, which is usually after 6 or 7pm and at weekends. 12) Keep a finance file which contains all your bank statements, bills and other financial correspondence. Also keep receipts and card payment slips in it and check them off against statements when they arrive. 13) Don't get stressed out over your finances. You'll only make it worse. A calm approach with good planning should ensure the minimum amount of problems.