How to Budget as a Student

Dec 10, 2018 by

The tuition fee system in the UK remains a key bone of contention, despite the numerous advantages that it offers to students.

At the heart of this is rising student debt, which according to the House of Lords economic affairs committee could peak at more than £1 trillion over the course of the next 25 years.

Given the financial challenges facing students in the current climate, it’s imperative that they adopt a proactive approach to budgeting and managing their finances. Here are some tips to help them on their way:

  1. Be Precise When Calculating your Incomings and Outgoings

Budgeting is a challenging art form, and one that’s most effective when you work precisely and deal in pence rather than pounds.

This applies to both your incomings and outgoings, as gaps in your knowledge or ill-informed estimates can make it difficult to manage your finances over time.

Start with any incomings that you have, including your student loan payment, grants and any money generated by part-time work. Then measure these against your total outgoings, as this should leave you with an accurate amount of disposable income that can be used to save, invest in your education or pay down debt.

  1. Use an App to Create an Holistic Approach

While a good old-fashioned spreadsheet can be used to show your workings, you may be better served by using a mobile app in the digital age.

The reason for this is simple; as it enables you to link alternative banks and financial accounts and create an inherently holistic approach to budgeting.

More specifically, you can create a real-time and largely automated budget that is constantly at your fingertips, which in turn enables you to manage your money on the move and adapt quickly to sudden or unexpected payments.

  1. If you Need to Borrow Money, Choose your Lender Carefully

While the previous two steps should help you to organise and manage your finances, they should not distract from the fact that even the most prepared of individuals may be caught short by sudden or larger-than-expected bills.

Students are even more susceptible to this risk, thanks largely to the staggered nature of tuition payments and the lack of disposable income that often blights those in higher education.

If you do need to borrow money, however, you’ll need to choose your lender wisely. After all, there are a number of financial products available to students in the modern age, but not all of these have been created equal and some may expose you to hidden and extortionate fees.

With this in mind, try to favour lenders that have designed products specifically for students, particularly those that minimise the cost of borrowing and the potential for late payment charges.

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