It may seem as though budgeting might be a pretty boring and dull subject, nonetheless it is an important endeavour all university students must learn to conquer. Being “good” with money is something our parents are constantly telling us to be. We are adults and as such we are expected to take care of our finances.
Here is a simple and basic plan to follow to keep track of your spending and how to control your spending habits better.
Whether you’re trying to save up for a big spend like a holiday or new video games console, or whether you just want to be prepared for emergencies (everything from broken laptops and a smashed phone screen to a medical emergency) a strong budget is needed to ensure you have the necessary funds.
The first step to budgeting is calculating your student budget. This can be as simple as listing all the money you’ve got coming in, tracking how much you spend, and seeing how they balance out. Once you’ve done that, you can set goals to help curb your spending and start saving more money.
Here’s how to plan your budget in four easy steps:
Establish your income.
This will set the parameters of your spending. Careful thought is needed in order to account for every possible source of revenue.
Estimate your outgoings.
You need to figure out where all your money is going. You can either look back at your bank statement to tot up all your previous purchases, or simply input a rough estimate of how much you think you spend on each category.
A list of common essential student spending is;
Groceries and rent
Bills (such as insurance, gas, electricity, water, celaphone)
Transport (bus, train, fuel, car insurance)
Course materials (textbooks, any other materials you may need equipment)
Examples of Non-essential student expenses
Nights out (alcohol, club entry, taxis, takeaways)
Hobbies (cinema tickets, gigs, festivals, books)
Clothes
Gym membership
Haircuts and other beauty expenses
Subscription services (Amazon, Prime, Netflix)
Travelling (flights, hotels)
Gifts and charity.
Calculate your weekly budget.
Once you’ve got all your expenses laid out before you, it’s time to break it down into a weekly budget. Brace yourself, as this is where it starts to get really ugly.
Work out your total income for a term at university
Minus your essential expenses for the same period
Divide the number you’re left with by the number of weeks in a term.
You’ve now got your weekly student budget – in other words, how much money you’ve got to spend on all those non-essential things each week.
For example, if your income across the first term is $3,000 and your essential expenditure adds up to $1,500, you would have $125 a week (across a 12-week term).
It’s better to budget your expenditure per week rather than per month, as it’s easy to go overboard at the start of the month and be penniless by the end.
Set goals for yourself
If you follow the steps above and come out with a reasonable weekly budget, then great! But what if you’re left with only a mediocre amount of spending money or none at all?
Whether you need to budget to get by, or you’re trying to cut back, it’s all about setting goals to either reduce your spending or boost your income.
You may realize you’re spending $100 on eating out each month, in which case you could try reducing it to half of that amount. Or, if your gym membership is sucking up half of your income then maybe it’s time to try some more creative ways of getting fit.
Overall there are many ways to make a budget there are apps, and spreadsheets built specifically for these purposes. If you don’t want to make a budget from scratch, these tools will help you. It is hard to decide what to spend your money on and how to control your spending therefore here is an outline on a few saving tricks;
Ask yourself: do you want this, or need it? Spend your money on the stuff you need first, and save the ‘wants’ for special occasions
Try to cut out the everyday money-draining monsters (we’re talking coffees, cigarettes, takeout...) that eat into your finances
Make sure you’re getting all the Student Finance that you’re entitled to, including any grants, bursaries or scholarships up for grabs
Give yourself a set allowance for each of your spending areas, such as going out or food shopping – and stick to it. If at the end of the month you’ve underspent in one area, you can carry that over to the next month, or use it to supplement your budget in another area for that month. Shopping trip!
To make it easier to track your daily spending, you can take a set amount of cash out at the start of the week and use that instead of paying by card.
Recycle everything. If you’re done with something, and it’s still usable, sell it on for cash or swap it for something else. Likewise, never buy new if you can get it just as good from someone else for less cash. This works for clothes, furniture, textbooks, you name it
Never stick with your bank account just to be loyal – loyalty doesn’t pay in this game! And some banks will even give you a cash incentive to switch
Look around for deals on your bills like gas, electricity and groceries. You can often save a boat-load of cash just by switching to a cheaper supplier
Planning ahead does wonders for your bank balance. This applies to weekly meals, nights out and even the odd occasion when you decide to eat out. As often as possible, try to know what you’ll be doing and when so you can plan ahead and budget accordingly
That said, don’t live like a monk 24/7. It’s important to still have fun and do the things you love! Just plan ahead for splurges so you’re never left with any nasty surprises on your bank statement.