Advice

How to manage money and live on a budget as a student

Managing money as a student
A high percentage of students say they wish they knew more about dealing with finance. Source: nattanan23 (via pixabay)
Struggling with money may seem like an inevitability when becoming a student, but there are some tools and tips which can help you manage money more effectively while at university.

By Vicky Witts | Advice Editor

University is often seen by many as a great way of gaining independence and learning new skills for later in life. Whether it is ironing for the first time, teaching yourself to cook, or figuring out how to use a washing machine, many of us develop new skills through trial and error while living independently.

When dealing with money however, this approach does not necessarily work. Especially as making mistakes with money tends to have more serious consequences than just shrinking a jumper or burning your food.

Therefore it is important to learn how to manage your money at university, as although many people may have had to deal with money in the past, such as with a job, it is unlikely that most of us have had to be so money conscious before.

In recent years, students have become associated with huge amounts of debt and little money to spend. In many cases this can become a reality in student life, with Save the Student’s 2019 National Student Money Survey finding that 79% of UK students worry about being able to afford living independently.

This may be due to a lack of knowledge about how to budget and deal with money effectively, as the same survey also found that 77% of the students wished they were better educated about finance.

However, struggling with money does not have to be an inevitability when becoming a student, and there are some tools and tips which can help you manage money more effectively while at university.


Student bank accounts: are they necessary?

As the academic year gets closer, many banks begin to advertise accounts specifically for students, including offers such as railcards, money, and gift cards. It is not always clear, however, if there is any need to get one of these accounts or if they are just another thing to have to manage.

For me, I found getting a student bank account particularly useful when I started university, as it allowed me to separate my student loan and money for groceries from any money that I wanted to save and not use for essentials. Other people, however, may find that their money is easier to manage from one account, so deciding whether to get a student bank account really depends on how you want to manage your university finances.


Effective food shopping

Shopping for food and other essentials on a regular basis may seem daunting when coming to university, especially when trying to create and stay within a weekly or monthly budget, as we can often underestimate the price of certain items and brands.

Some good methods for managing money which may be useful include creating a weekly budget for how much you want to spend, buying cheaper supermarket own-brand alternatives and being aware of promotional offers.

Additionally, although it may seem quicker and easier to have a takeaway or ready meal for dinner, buying items to cook your own meal from scratch even just once a week can save on unnecessary food costs.


Keeping track of shared bills

A big change which I and many other people have to face when transitioning from first year university halls to independent housing in second year, is managing your bills if they are not included in your rent.

This can seem daunting, particularly as it is unlikely that many students have ever had to deal with companies such as gas and electric providers before, and it can become hard to manage payments in a house with numerous flatmates.

To keep bills on track in this case, creating a new bank account for your house, setting up a direct debit to schedule payments, and creating a list to tick when you and each of your housemates make a bill payment can help ensure that your bills are always paid correctly and on time.


Avoiding pressure to spend money

Whether in freshers week or throughout the rest of the year, spending money on social activities is often a key element in a student’s budget. It is true that going for drinks with friends, eating out or visiting the cinema can be a great way to unwind and enjoy your time at university. However, it can also create some financial problems if done frequently.

This is not to say that you should stop socialising altogether, but rather, that you should consider only participating in social activities that you can afford. Pressure from friends often means that we proceed to join in activities that we cannot necessarily afford, due to fear of missing out. Turning down the occasional night or meal out, however, can help you save and manage money until you can next afford to go out again.

Alternatively, substituting expensive nights out with less expensive activities such as a games evening or movie night can also help you cut down on your spending.

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