How to budget as a student: Saving tips and planning guide

The page covers everything you need to know about student budgeting from tips on how to work out your budget and how you can make your money stretch further month by month.

Written by Lucinda O'Brien, Editor - Personal Finances

Updated on 24 October 2024

Work out your income Work out your expenses Calculate how much you can spend per week Set targets How much do students have in savings Student budgeting tools

One of the main things you have to adjust to as a student is managing your finances. For potentially the first time in your life you have independence, and the temptation to blow your maintenance loan on a new wardrobe or concert tickets can be strong. But you need to be careful as money is likely to be in short supply. In fact, statistics from Save The Student show that more than a third (35%) of students use their overdraft as a source of income.

That’s why as part of our student hub, we’ve collated this handy student budgeting guide so that you can keep track of your outgoings, while also leaving room for a little extra spending money at the end of each month. So if you’re keen to find out how to save money as a student then read on.

Work out your income

Before you begin spending your loan, you need to work out how much money you have to play with. This will vary from person to person and be based on various factors, such as family background and whether or not you had a job before university.

Your student loan will likely be your main source of income at university. Tuition fees typically cost £9,250 per year and the bulk of your loan is designed to pay for these. The part that you need to be concerned about during your time at university is the maintenance loan. This is designed to cover all your essential costs, including accommodation, food, books and equipment.

The average student receives about £496 a month for their maintenance loan, while the maximum for students living away from home outside of London is £10,227 a year.

Additional sources of income include any grants, bursaries, sponsorships or scholarships that you might be eligible for. On top of this, any money you may generously receive from a parent or guardian. An income from a full or part-time job can also be substantial, as can savings.

If you’re concerned about how you are going to pay for your degree, read our guide about how to pay for a degree using student loans and funding.

Work out your expenses

After you’ve worked out how much money you’ve got coming in, you now need to work out how much money you’ve got going out.

There are some costs you can’t escape, the most obvious being rent for student accommodation. This will be your largest expense throughout your time at university. Other essentials include food and drink. Then there are the bills:

Gas and electricity
Water
Broadband
Contents insurance
TV license
Mobile phone contract

Plus, if you don’t live near the campus, or are eager to travel to visit friends and family throughout your time at university, then you’ll also have to factor in the expense of buses, trains, car fuel and car insurance, depending on what mode of transport you use.

And finally there are the course textbooks that you’ll need to get your head around if you are to ace that degree, or specialist equipment if you are studying a more technical subject.

These are the non-negotiables, the essential expenditure. But of course, there are other things you’ll want to spend money on, so that you can enjoy your time at university.

These include:

Nights out (and all the expenses that go with them)
Hobbies and societies
New clothes
Gym membership
Haircuts or trips to the beauticians.
Subscription services such as Netflix or Spotify
Travelling and holidays
Eating out and takeaways

Calculate how much you can spend per week

This is the most important part. First, you need to calculate how much money you’ve got coming in per week. This is a combination of all your sources of income across the year divided by 52. Then you need to work out how much of that income is going to be eaten up by your essential expenses.

The resulting figure is how much money you can spend on those non-essential items, that make your university experience fun and enjoyable.

Set targets

To help manage your finances it’s a good idea to set yourself some goals or targets. Not only does it give you something to aspire to, but also, means you are less likely to spend all your income in the first few weeks of university.

Ways to boost your income

The most obvious way to boost your income is to get a part-time job. If that’s something that might interest you, then check out our guide on how to get a job as a student.

It doesn’t even have to be something as formal as having a permanent position, even just filling out some online surveys, or partaking in some mystery shopping can give your income a bit of a boost.

One of the most effective ways of boosting your income is to pick the right student bank account. To know which one you should pick, check out our student banking page for a run down of all the available options.

Ways to reduce your spending

A good way of reducing your spending is to think about which things you want versus which you need. It’s about asking yourself whether you really need to do another online shopping haul, whether you really need another takeaway, or whether there are alternatives.

Subscriptions, in particular, are real money-drainers. Do you really need Netflix, Amazon Prime, and Disney+? Consider how much you watch of each and whether it is really value for money. Plus, if you have a gym membership consider whether there may be cheaper ways to stay in shape.

Another expense that can cause your monthly spending to go through the roof is mobile phone contracts. Purchasing the newest tech can cost as much as £50 a month – sometimes more – which is often unsustainable for students. However, there are many ways to save on your mobile, such as purchasing a refurbished phone and switching to a SIM-only deal.

How much do students have in savings

Statistics show that 14% of students start university with no savings in their account, with a further 13% beginning university with £100 or less. This means that more than a quarter (27%) of students have less than £100 in savings.

A breakdown of how much money students have in savings before starting university

Money students have in savings before university	Share of students
Nothing	14%
£100 or less	13%
£100 or less	14%
£501-£1,000	14%
£1,001 to £2,500	16%
£2,501 to £5,000	13%
£5,001 to £10,000	9%
£10,001 to £20,000	5%
£20,001+	2%

Source: Statista

The statistics also show that close to three in ten (28%) students have between £101 and £1,000 in their bank account. A further 29% have savings of between £1,001 and £5,000, and 7% of students have savings in excess of £10,001.

Read more student statistics, including data on applications, student employment rates, and more.

Student budgeting tools

Student budgeting tools are a great way of keeping track of your spending and income, thereby ensuring that you always have enough money come the end of the month. Plus, it’s easier to build up your savings if you have a student budgeting tool that you regularly update.

The simple spreadsheet

The humble spreadsheet is the original and, in many ways, still the best tool for managing your finances. Indeed, it could be the only thing you need.. All you need to do is input your income, your essential and non-essential expenses and this will show you whether you are going over budget.

If you are unsure how to set one up, then there are plenty of handy templates out there that offer all the formulas you require.

Online banking tools

Every banking app out there tracks your income and outgoings, so you get a clear idea of where you’re spending your cash. By keeping track of this, you can get ideas of where you can cut your expenditure.

Plus some of these banking apps have ways in which you can put aside part of your income so you aren’t able to spend it all at once.

Free online budget calculators

If you’re after something a little less complicated than a spreadsheet, then download a free online budget calculator. These are often simpler to use, especially on your mobile device.

Use a standing order or ask someone else to manage your money

If you really don’t trust yourself to manage your finances, then why not ask a parent or guardian to look after your maintenance loan. This way, they receive your maintenance loan and can send it to you in monthly or weekly installments. This means there is no risk of you spending it all at once.

FAQs

What is a student budget, and why is it important?

If you want to know how to save money as a student, then having a budget is crucial. A student budget is a financial plan that helps you manage your income and expenses while you are in school. It is crucial because it ensures that you have enough money to cover your essential costs, avoid debt and save for future needs.

ow can I save money on food and groceries?

You can save money on food and groceries by cooking at home more instead of eating out. It also helps to plan your meals and make a shopping list to avoid impulse buys. Also,look for discounts and use student cards for deals, or buy in bulk and store food properly to reduce waste.

How can I manage unexpected expenses?

Try to build up an emergency fund by saving a small amount regularly, avoid using credit cards for emergencies unless absolutely necessary, look for part-time or freelance work to increase your income, and cut down on non-essential expenses.