/ Money

Lessons in life: learning to stick to a budget

Budgeting while studying

Spending beyond your means could see you learning to live on a budget the hard way, so do you know how to avoid the usual money traps and pitfalls to prevent that?

It was November 2008. I was two weeks off from completing my first term at uni, and counting the days until a whole month of home cooking and Sky TV.

I popped by the cash machine to grab some cash for my food shop (penne, cheese, pesto).

‘You have insufficient funds to process this request.’

I tried again. The same emotionless message appeared on the screen.

Had someone gotten hold of my details and raided my account? I remember I was a wreck on the walk to my bank to get a full statement.

Running out of money

Long story short, I’d completely miscalculated and spent more on post-club takeaways and unnecessary books, than I actually had in my account.

Also, I hadn’t properly looked into all the options my bank offered to keep this from happening, namely text alerts and overdraft facilities. The more you know, huh?

Fortunately, my mum donned her superhero cape, emblazoned with a ‘£’ rather than an ‘S’ on this particular day. But for many students, a quick call home if things get rough financially isn’t an option. I was lucky, it could have been worse…

Due to my lack of funds, I missed out on end-of-term socials and gatherings at home; plus some members of my family had to wait until after Christmas for their presents, which I felt really bad about.

The No.1 student budget tip

A term is a long time. When I talk to students about the scary topic of student finance, the No.1 tip I give is look at what you have to play with, and work backwards from the end of term to structure your budget.

This kind of forward-thinking isn’t the easiest (or most fun) option when you’re 18 and away from home for the first time.

Seeing a big chunk of money just appear in your account is delirious – the possibilities are endless (you think).

When our loans went in at the start of term, everyone went clothes shopping; you’d want to look good that night when everyone went out.

You’re definitely not thinking six weeks ahead when it’s back to dry noodles five nights a week.

That’s why it’s important to know how to be smart with your money at uni.

How to save more money at uni

You can learn a few more things from my (and countless other students’) money mistakes:

  • 1) Set up text alerts from your bank to keep track of exactly how much you have.
  • 2) Don’t choose a student bank account based on incentives. Look at its interest-free overdraft.
  • 3) Plan your meals a week ahead so you don’t splurge on spontaneous takeaways.
  • 4) Recycle and upcycle. Borrow a friend’s shoes for a night out rather than buy new.

You can read more student finance advice on Which? University.

If you’re at uni, you now have about seven weeks left of this term. Do you have a plan to make sure what’s in your bank account lasts? Or, if you have a child or grandchild at uni, do you know if they’re coping with their budget? Have you discussed it with them and worked out ways they can make their money last longer?


The first thing to do so you stick to budget is to destroy your Credit Card you can manage things a lot better without it

If you pay your card off in full every month it can help you manage your money and could help avoid overdraft charges, otherwise I agree.

Why on earth isn’t the money deposited into students bank accounts weekly to help them budget?

I remember when I was paid weekly wages when I started work and it was indeed easier to manage and a good way to learn.

Me too Sophie. It would certainly help students learn how to handle their finances as well.

We are all aware of major expenditure but I suggest it is worth keeping an eye on smaller everyday costs. Cooking for yourself can be cheaper than an endless succession of carry-outs and ready meals, and cooking with others can be fun.

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You might have got a bit carried away on this one Duncan.

Paul has admitted students blowing their loans on clothes, clubs (pricey drinks?) and takeaways.

My favourite app for budgeting is an A6 cash book, a Bic pen and a rubber band. On the left hand page, put the week at the top and, each day, with your last pint or cup of Costa, write down everything you have spent. Add it up each week at the bottom. On the right hand page, start with your bank balance and write down your withdrawals. Hold your receipts in with the rubber band (comes free from your postie).

This way you will shock yourself into just how much those incidentals add up to, but you’ll soon know the real state of your finances and, if you have any sense, realise what you can afford and what you can’t. And you’ll know if you are heading for a nasty overdraft.

Credit cards tempt you into the convenience of impulse buys when you don’t have the ready money. Avoid them until you have a healthy income that exceeds your spending.

Boring? Well, you will at least know the truth and, if you are reckless, you’ll head for financial disaster fully informed.

I started this in my very impecunious days and the habit has stuck. I budget each year based on this.

This app is given f.o.c. Donations please to the happymalcolmfoundationfortheneedy.con

Do your elastic bands come through the letterbox or get dropped on the path Malcolm?

Usually around the letters. Just occasionally on the path. Sometimes they are even supplied with only two items. I have quite a collection.

I wonder if there is a free phone app that can be used to record purchases and income. Some banks have phone apps linked to electronic banking, though I have no experience. I’m glad you spotted the typo within the editing time, Malcolm. 🙂

Us too. Just think of all the money the Post Office could save if posties took them back for reuse?

If they were wider, they could have adverts on them and make dosh for the PO?

“typo” -4 points. The banks – some anyway – I believe offer budgeting tools. They are discussed in the CMA review. I have no experience of them either, though like you wavechange. Perhaps when students open an account they also include in the pack an A6 cash book, Bic pen and a starter rubber band?

We’re back to the previous “bank bashing” conversation with a new twist. We’ve been passed back to the other side and the responsibility of the public to avoid debts that the banks are only too willing to give them. In the ordinary run of things, budgeting is about sensible money management and controlling the “must have now” urge to melt the credit card. That’s fine if the credit card is meltable , but not if you have suddenly lost your job, you are on a zero hours contract with no hours available or, for many other reasons, the money just isn’t there. Budgeting then becomes a tragic joke. So, yes, the usual rules apply to most of us. Check the bank statements; check what is essential spending and what is desirable but unnecessary and check how much of the latter can be afforded while still providing for that so called rainy day. That’s really all there is to it. Education in schools should be mandatory and ways to help put this education into practice when students become independent should also be considered, if not entirely compulsory. We need the freedom to make mistakes, provided these are not too habit forming or disastrous. Regarding those who can not budget for reasons beyond their control, well, that’s a different debate and much too complex for this particular conversation.

“Freedom to make mistakes” – we all do it. Question then is – who should bail us out?

Mostly the bank of mum and dad with suitable admonishment attached and, maybe, the need for repayment. In other cases the uncomfortable fact of a shortage of funds may be enough to avoid a repetition of what happened in the first place and a staple diet for a while as the debt is paid off. The lender would be wise to keep an eye on the individual and the state should be watching any rapaciousness and usury that might ensue. I feel that this is somewhat simplistic but I’ll leave it at that for now.

Take a look at Nationwide’s leaflet on overdrafts for student bank accounts. They seem particularly benevolent.

When I was a student the university bookshop offered 10% discount to students at certain times of year. Now there are numerous discounts available to students, not least from the banks: http://www.moneysavingexpert.com/students/Student-bank-account

Of course discounts are widely used to encourage us to spend rather than save.

If you were quick at the beginning of your course, our bookshop sold secondhand books from the previous year’s students. Helped out both groups.

One thing to watch for is that secondhand textbooks may not be the current edition, which may or may not be important depending on the content of the module.

Science textbooks often provide password-protected access to online resources including supplementary information, videos and self-assessment tests. Even if the password is passed on with the book, the access may be limited to a year after registration on the publisher’s website.

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