With fees sky high and with the likes of food, travel and electricity prices still soaring, students need to plan ahead for their university career really carefully to ensure they’ll be able to afford to make it to the end.
And while debt is certainly a part of university we’ll just have to accept for now, it’s important get the right sort of debt (so that’s student loans and overdrafts as opposed to credit cards and unsecured personal loans), and then creating a budget to keep on top of your finances.
The majority of students will get help with their fees, so if we assume that’s all taken care of, here’s what to do next…
1. Work out your income from things like your student loan, grant, employment, parental help etc. – don’t include the interest free overdraft you’ll get with your student bank account);
2. Estimate your likely costs, with an emphasis on necessities like food, rent and course textbooks – spends for socialising and clothes come last;
3. Are you going to want to do anything during the summer that’ll cost you a lump sum? Work out how much you need to save before you need to pay for it and try and work that into your budget;
4. Give yourself a weekly limit on each area of your budget – especially for nights out, shopping, eating out etc.;
5. Monitor as you go by using bank statements and receipts – make yourself an Excel spreadsheet and record everything every couple of days, or as often as possible;
Student loan: £5,000*
Student grant: £1,000* (these are worked out on a case-by-case basis, so the amounts here are the maximum amounts you’d be likely to receive)
Employment: £2,500 (part-time work during term and summer holiday)
Parental help: £1200
TOTAL = £9,700 (per year)
Dividing this total amount into weekly chunks will make your budget more manageable, because most student lets are advertised as a weekly amount. Now you can either divide the amount by how many weeks there are in a year (52) or how many weeks you’ll actually spend at university (30) – it simply depends on where you plan to live, and whether your landlord offers free summer rent (the majority don’t). Using the example above, that leaves £186 a week over 52 weeks, or £323 over 30 weeks.
Next, work out a weekly spend on essentials like rent (which can range anywhere from £55 to £100 a week), bills and food. As a very rough example, here’s what you might have to account for
TOTAL: £115 (per week)
After this, spends just depend on the individual and where they live. A comprehensive survey by the National Union of Students does give a good overview of typical student spending patterns for discretionary items, though, and here’s what they found out:
Going out: £35
Mobile phone: £10
Other general: £20
TOTAL: £86 (per week)
You can’t really calculate these costs on a weekly basis, so just do them per term. Another rough estimate here, a student might spend the following:
Course books: £40
Course-related equipment: £30
Printing / Photocopying: £15
Other course-related expenditure: £50
TOTAL: £200 (per term)
Now try and work out your own budget, using the above example as a very, very rough guideline. If you’re not sure about how much bills will cost, do a little bit of research and make your best guess – you can even overestimate a little. And the most important thing to do is make sure you stay on top of your budget – you’ll probably have to constantly adapt it at the beginning as you find your feet, but you soon will, and you’ll be well on your way to financial stability!