Budgeting tips for students

Female student worrying about money

Between the cost of living and tuition fees, today's students are leaving university with increasingly large debts. In fact a study by the Sutton Trust earlier this year suggested that the average student would now leave further education with debts of amounting to a staggering £44,000.

So if you're heading off to uni this year, here are a few tips on budgeting properly to ensure you don't end up paying for the privilege for most of your adult life.

Working out your budget
To budget for your year ahead, you will need to find out what your income and expenditure will be, which is tricky for freshers, admittedly. However, to start with, add up your student loan, any grants, bursaries or scholarships monies, cash provided by your parents or guardian, savings that you may have, and take into account any income from working.

Then your expenditure, including tuition fees, the cost of accommodation, estimated utility bills, contents insurance, food, books and equipment related to your course, and travel, including going to and from home to uni. What is left over is available to use on extras like clothes and a social life.

According to the 2012 study by LV entitled Cost of University, the average student spends close to £10,000 a year on life at uni, not including tuition fees, but don't get bogged down in annual costs - it is best to stick to a monthly budget.

It is worth remembering, however, that the final term is shorter, but if you are due to return to uni after the summer holidays, you may still need to pay for accommodation throughout so don't blow it all on an end of term bash!

When expenditure exceeds income
Many students find they run into financial problems when their outgoings exceed the money that's coming in. If this turns out to be the case, you can either increase your income, or cut back on spending.

While you'll no doubt work hard to get your desired qualification, consider whether you have time to work, either at weekends or during the holidays. A part-time job during term time can really help to boost your income, and even if you can only work when the university is closed, if you save as much as you can, it could help you to get through the next term.

On the other hand, if you're struggling to pay the bills, it's time to take a closer look at your outgoings. Add up all the essentials, and then work out what you're spending on what are really luxuries, like going out or buying expensive clothes and shoes. If it helps, keep a spending diary for a month - simple changes such as swapping branded food for own brands or trying a budget supermarket can make a big difference.

And when it comes to your social life, keep your eyes open for student discounts and offers that could allow you to enjoy a night out without digging too deep.

Further borrowing
If you just can't manage on your income or are hit with an unexpected one-off expense, borrowing may be your only option. Most of the high street banks offer overdraft facilities on student accounts, many of which are interest free. However, don't be tempted to max out the limit - stick to an overdraft that will cover your immediate needs, because sooner or later, you'll have to pay it back. There are many credit cards that offer interest free introductory periods, but unless you can pay off the whole balance within that time, it's best to steer clear. Once the introductory offer runs out, you'll find the debt increasing at a rate of knots when the interest kicks in.

Help and advice
For many young people, student life is the first time they will have to deal with the ins and outs of finances and budgets, but if it becomes a problem, it is always best to seek help sooner rather than later.

Wherever your university or college, there will likely be a financial adviser on hand to help you manage your finances and offer advice on how and where to get help if necessary. And for more information on working out your budget, both the Money Advice Service and UCAS provide information online that may help.

Have you recently graduated from university? Did you successfully manage your finances, or have you been left with significant debts? Leave your comments below...
How to Survive on a Student Budget