Managing your finances at University
For many people, university is the first time managing their own finances. This can seem confusing if you’ve never been in charge of your own money before, or not on the same scale! However, with a bit of organisation, getting in control of your money can be very satisfying. Look below for advice about how to manage your money at university, and some top tips from our current students.
1. Receiving Your Money
Student finance can come across as quite a complicated system. If you do still find yourself a bit confused, the video below provides a useful break down of student finance, to help you understand how the process works.
Student maintenance loans are paid in three installments, one at the start of each term. A maintenance loan is provided to help you with your living costs; rent, food etc. The exact date you receive yours depends on your term start date. Once you have sent all your information to student finance you can see your student loans payment schedule in your online account. How much you receive depends on your individual circumstances.
You may also qualify for a bursary or specific scholarship from your university. This is usually a grant given to you which you don’t have to pay back at the end of your studies. If you do receive a bursary, it’s important to incorporate this into your overall budget.
If you haven’t yet sorted your student finance- don’t panic! You have up to nine months after the start of the academic year to apply. This can be done through the government website. But it’s better to apply sooner, rather than later.
It’s important to remember that you must apply for student finance funding every year. You’ll be emailed by student finance near the end of your final term, but be aware that your maintenance loan does not automatically renew.
2. Organising your money
Once you’ve worked out how much loan you should be receiving, it’s good to create a budget of how you plan to spend it. Aim to set a budget before you receive any money – as this will help you make sure that you are spending within your means
There are lots of different ways to budget, and the internet is a great way to find a budgeting style that best suits you. How you decide to budget your money is completely up to you. Below are some different budgeting options (and tools to help you) that you may wish to try!
The 50-30-20 is a budgeting plan that helps you organize your finances:
- 50% of your income goes to necessities i.e. rent, food, bills, subscriptions
- 30% goes towards your wants i.e. new shoes,
- 20% gets put towards savings (or debts) i.e. going on a fieldtrip, paying off your overdraft, your house deposit for next year.
- 50% – £940 for essentials
- 30% – £564 for wants
- 20% – £376 for savings/debts
You can then take this model and experiment with different sums before you commit. For example, if you have seen a room that you like for next year, you can ask yourself, can I afford to rent this room, and add all my bills on top, and still only spend 50% of my income on necessities? The same can be applied to wants – can I really afford a new pair of new shoes if they cost £400 (will I have any money left after for the rest of the term?)
The Envelope System
If you feel the 50/30/20 system leaves too much flexibility, and would like a budgeting plan that is slightly more rigid, the envelope system may be for you. The envelope system works by creating multiple envelopes (or Monzo Pots) and dividing your money between each one. You use the money in each envelope for a different thing ie bills, groceries, coffee. This makes it easy to see how much you’ve got left for each type of spending, so you don’t accidentally spend your rent on new shoes.
This budget helps you to stop spending money on small things, and also means you don’t have to keep track of every transaction you make. The envelope system traditionally uses cash, but with new online banking systems like Monzo that let you create ‘pots’ instead of envelopes, this budgeting style can be used if you don’t like cash.
Online budget planner
If you don’t like the pen and paper budgeting style, there are lots of fantastic online resources. The Money Helper online budget planner is a fantastic tool. It is recommended by the government and is really easy to use. You fill in all of your monthly spending to create a tailor-made budget for you with visual graphs to help you see exactly where your money is going. It also provides some advice based on your spending habits to help you make your money go further
It’s also good to think about future payments as well when you are budgeting. For example, if you decide to move out of university halls in your second year, most student rooms or houses require you to put down a deposit before you move in. This is usually 4-6 weeks rent up front. For example, if you are renting a room in a student house that costs £500 per month, you may be required to pay a deposit of £750 before you move in. It’s good to save for this early and have it stowed away for when you need it.
Side note: Whilst we are on the topic of student housing and deposits, if you do move into a privately rented student house, it’s a good idea to take pictures of the property (any marks on the walls or furniture for example), as a record of the state of the property when you move in. This will help to prove that you didn’t cause any damage to the property whilst you were in it, and should help you to get more of your deposit back once your lease is over.
You might also want to plan a trip for your longer summer holidays, or attend a specific event with friends. Budgeting for these larger payments throughout the year will make this easier for you.
3. Storing your money – Student bank accounts:
Once you have your budget laid out, it’s good to know where you’re going to keep it. A piggy bank is probably not going to suffice. You will need to set up a current account. If you already have one, that’s great, but it may be worth considering opening a student account.
Student current accounts are designed for university students and usually offer benefits and interest-free overdrafts.
Sites such as Money Saving Expert can be useful in helping you to decide which account is best for you. It’s definitely worth doing your research and finding out which account best suits your needs.
4. Spending Your Money
Click each of the black bars below to learn more…
5. Earning more money
Click each of the black bars below to learn more…
Scholarships, bursaries and grants
6. Advice from St John’s Students
Watch the video below to see some top budgeting tips from St. John’s undergraduate students.