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Student budget 3 point plan

9th August 2021

On your first day at university, with your maintenance loan for the term plus perhaps some savings from a summer job, there is every chance you have more money than ever before.

But while your bank balance may be in rude health, you will need to budget carefully to make it stretch to the end of term.

And no matter how careful you are budgeting, you may have to borrow some money to help bridge gaps from time to time.

This three point plan will help you budget and borrow with confidence, and steer clear of money worries so you can focus on making the most of student life.

1 - Know your budget

Step one is the most important. Sit down, and list all of your essential outgoings for the term ahead.

As well as regular monthly payments such as rent and utilities, make sure you include one-off payments, such as books at the start of term, and your train ticket home at the end.

If it’s your first time living away from home, when you’re working out your shopping bills, don’t forget things you may not have had to buy before, such as washing powder and household cleaning products.

Next, add up all the money you have for the term - lump sums such as your maintenance loan or savings, and regular income such as from a part-time job, or parental contributions.

Subtract your total essential expenditure and money put aside for unexpected emergencies from your total income, and what is left is what you have to spend on non-essential items, such as new clothes, socialising and entertainment.

Divide this by the number of weeks in the term to give yourself a weekly spending limit.

There is a handy budget calculator to help here.

Make sure you check your budget against your actual spending regularly to see if you are on track.

For more information, including a budget spreadsheet and a list of apps that can help, click here.

2 - Boost your budget

Once you’ve worked out your budget, it’s time to see where you can cut your spending, and boost your income.

Lots of firms offer student deals and discounts on a huge range of items, from tech kit such as laptops, phones and software to clothes, travel and shopping. There is a handy list here.

Also, if you are only living in your student accommodation for nine months, you don’t want to sign a 12-month contract for utilities, including broadband.

Ask yourself if you really need everything in your initial budget - can you share text books with a classmate for example, and are there free versions of software that will do everything you need?

Can you boost your income? A part-time job is a good option, if it won’t affect your studies, but you may also be eligible for bursaries or other financial support - click here to find out more.

And think about other opportunities to make some money - can you sell your old text books at the end of the year for example?

3 - Borrow wisely to bridge the gap

No matter how carefully you budget, there may be times when unexpected costs are greater than any income or savings you may have.

It could be down to an unexpected one-off expense such as a broken phone screen or a new wheel for a bike.

If you’re running short every week, then you may need to revisit your budget.

But on many occasions, you can borrow carefully to bridge the gap.

Most student accounts offer an interest-free overdraft for students - TSB’s is up to £1,500*.


*To have a Student Account you must be 17 or over (18+ including overdraft), have been a resident in the UK for at least three years and be studying for a full-time course that lasts for a minimum of two years or be on a one year access course leading onto a full time degree.

Overdrafts are subject to status and repayable on demand.

You should not spend this all at once but consider it as an additional tool to help you budget across the term. Remember, you will have to pay it back.

A credit card can be useful for emergencies, so a dropped phone doesn’t wreck your weekly budget. Buying with a credit card also gives you extra protection as a consumer - click here for more info.

With any credit card spending, you should pay your balance off as quickly as you can. If you only pay the minimum payment, you will pay more interest and it will take longer to repay. And don’t forget that going over your limit or missing a monthly payment can lead to extra charges and will damage your credit rating.

This is not intended to give financial advice or a personal recommendation. If you need a personalised recommendation based on your personal circumstances, you should seek the advice of your financial advise