Students are being urged to set up and maintain a budget whilst studying at university, in order for them to maintain control of their finances and avoid having to seek debt advice.
The need for a student budget has been strengthened after reports from GE Money found that 11% of UK students are unsure about their personal financial status. Half of students manage to accumulate unsecured debt of over £5,000, yet only 24% believe that they will manage to clear their debts within five year of graduating.
A spokesman for GE Money commented: “It is important to set budgets and stick to them. University should be a fun positive experience, however, all too often, it can turn out to be a financial minefield.”
Simple Student Budget Plan
With these student debt figures in mind, it makes sense for a student to take steps to avoid getting themselves in unmanageable levels of debt.
Before you go to University or within the first few weeks, you should put together a student budget so you know what to expect. Even a simple student budget plan will help you keep track of your finances and allow you to gain control of any debt management issues.
1: Know your Outgoings.
There will be unavoidable outgoings which you need to budget for:
a) High-Cost Outgoings: It is best to start off knowing what high outgoings you will have. These will include things such as course fees, rent payments, personal computer/laptop and essential texts for your course. Once you have worked out which big costs are unavoidable, for your student budget, you need to know when each of these will have to be paid.
b) Monthly Outgoings: Next, work our what smaller monthly costs you will have. Remember that your rent payment might not include electricity and gas bills, and these will have to be paid separately. Other costs to think about are your mobile phone bill (consider swapping to pay as you go so you can keep better tabs on your spending), Internet connection and travel card.
c) Weekly Outgoings: Now move down a level to your weekly costs. The only way that you can make the most out of your student budget is if you are going honest about your expenses. Having a student budget is pointless if you pretend that your socialising budget is £0!
Once you have worked out your weekly outgoings, write down all the costs. From this point you can work out what your income should be and what items you need to pay first.
Your Student budget for your outgoings may look something like this:
A) High Cost Outgoings
One off Payments
Course fees – £1,500 a year
Course Books – £300 a year
TV licence – £139 a year
Laptop – £300 total
Accommodation – £1,000 a term (x3)
Total over three terms: £3,739
B) Monthly Outgoings
Utilities – Electicity, Gas etc – £30
Mobile Phone Credi/Bill – £20
Term Total: £1,550
C) Weekly Outgoings
Food – £40
Socialising – £30
Travel – £15
Term Total: £2,635
Total Outgoings: £7,924
2: Know your Income.
Your student income will be dependant on a number of factors; you might find that your income is a mixture of student loan, government grant, part time jobs and financial support from your parents.
After you have pinpointed all the areas where you will be getting an income, you can begin to work out the budget for your incomings. Your student budget for your income may look something like this:
Income from official sources
Student Tuition fee loan – £1,500
Maintenance loan – £3,000
Grant – £1,100
Part Time Employment – £200 a month
Support from “Bank of Mum and Dad” – £500
Total Income: £8,150
The idea is that the Total Outgoings and Total Income figures are the shame, or that you have more incomings than outgoings. If you find that your total outgoings are more than what your income is, then it is time to work out how you can make additional funds.
See if you are entitled to higher grant or support through your university. You could try and cut down on your outgoings too, such as taking course texts out on loan from your library instead of buying them.