Budgeting for college or university
You’ve got the place and done the hard work. Now it’s a case of sitting down and thinking about how you’ll manage your finances over the course of your studies. We take a look at some of the average costs of going to university or college, and how you can begin to budget for these.
- What are the average costs of being a student?
- Working out your budget
- What if my income does not meet my expenditure?
What are the average costs of being a student?
For many people becoming a student is the first experience they’ll have of living away from home, and with this comes the responsibility of dealing with the costs. The table below gives you an idea of the average costs over one year of a student at university or college outside of London:
|Cost type||Cost per year|
|Travel to university||£391|
|Other travel and holidays||£1,705|
|Household essentials, including toiletries||£363|
|Books and equipment||£464|
|Total cost per year||£21,440|
(Source: National Union of Students, 2013)
Working out your budget
A budget is always based on the money you have coming in – your income, and the money you have going out – your expenditure.
As a student you may not have income from work, unless you have a part-time job, but you may have income from student loans, grants, and contributions from family. To make a budget you should try to work out how much income you will have each week or month at the start of each term.
But remember the final term will be shorter in terms of weeks, even if you receive equal termly instalments of your loans and grants. Don’t forget to budget and plan for the summer months ahead if you will be continuing your studies after the break.
Once the income is sorted and you know how much you have to spend each term you can begin to look at the expenditure. Try to work out what your expenditure will be over the same period – weekly or monthly. The key trick now is to make sure that your income is either more or the same as your expenditure. If expenditure is higher you’re going to run out of money!
What if my income does not meet my expenditure?
This is a problem faced by thousands of students every year. There are four solutions to consider:
Increase your income – you may be able to get some part-time work to increase your income. You may only be able to do this during your holidays, but it will still make a big difference to your budget.
Reduce your expenditure – take a look at the expenses within your budget. Are there any areas you could cut down on a bit? A night in, rather than on the town, once a week might help you to save quite a bit over the year. Swapping some branded food for supermarket-own brands can also make a big difference.
Speak to an adviser – your university or college is likely to have a student money adviser who can help you budget and manage your income.
Consider borrowing options – once you’ve tried increasing your income and reducing your expenses you may need to consider forms of borrowing to make up the difference. Usually the most cost effective form of borrowing for students is through an interest-free overdraft, but other options are available. Only ever borrow what you need – don’t be tempted to borrow more just because it is available to you. The money will have to be paid back, and the less you borrow the better your financial situation will be when you finish university or college.