Budgeting for university
Between accommodation costs and making the most of student life, budgeting for university can be tough. Read our tips on managing your money to help you get started.
Learning how to budget as a student can help reduce money worries. If you estimate your student budget before going to university, you could identify where you need to make savings or find extra income.
The first step in managing your money is to work out your minimum income for the year. For students who are resident in the UK, start this when you have your student finance in place.
Student loan (including your maintenance loan)
The tuition fee loan will go straight to the university. The maintenance loan is intended to cover a student's living costs – but it's means-tested, based on your household income. Only those with a low household income are likely to be eligible for full financial support.
The actual amount of maintenance loan depends on where you ordinarily live before you become a student. Each nation offers different living cost support. How much you can get also depends on where you live while you study. If you live at home, you'll get a lesser amount. Students living in London get a higher amount (except if they're from Scotland).
Get your student finance application in early, and make sure you get confirmation of your entitlement to student finance. If the provider is waiting on further evidence, your loan could be held up. Once confirmed, you should get your first maintenance loan payment in your bank account shortly after you register on your course.
Other financial support
Some students may be eligible for other financial support, such as grants, bursaries or scholarships. This could include government grants if you have children to look after, bursaries if you have a low household income, or university scholarships.
It's worth checking for other sources of financial support. Even a small amount of extra money can make a welcome difference to your student budget.
When managing your money, remember to include any contributions your parents might make to support you while you study. Make sure you add it to your income in your student budget.
Income from work
Many students have part-time jobs to help with their finances. You could also try and get a holiday job in the summer before going to university. As well as saving up for university, the work skills you gain could help you get part-time work once you're on your course.
If you're still concerned about managing your money as a student, you could consider a gap year. Taking one before you start university could help you save extra money.
Make sure you don't overpay income tax if you work. Students don't generally earn enough in a year to go above the 'personal allowance' income tax threshold.
However, if you work full time, your tax is worked out on the assumption that you're doing the job over the course of a year. Check your payslips. If you need to reclaim income tax, claim a tax refund from the government.
Though working during term-time may be discouraged at some universities, many students work part-time during their studies. Income from working part-time shouldn't affect your entitlement to loans and bursaries.
You should make sure your working hours fit with your academic requirements and don't distract from your studies.
Most universities have a student employment office that can help you find part-time work. Our university profiles also have information.
Many universities offer sandwich courses, involving a placement year or industry programme integrated into your course. Many placements include a salary, and some may lead to sponsorship during your final year. They can provide a great experience and could boost your chances of being employed after graduation.
Holiday jobs (summer and Christmas)
Outside of term time, there are opportunities for earning cash and developing skills for your CV. Many organisations offer placements or internships that can be sponsored and only last for a few weeks. Remember that in retail, stores get ready for Christmas early.
If you've saved money ahead of going to university, make sure you include this in your student budget.
Your overdraft shouldn’t be treated as part of your income and should be for emergency use only. While it may be tempting to think of a bank overdraft as money you can spend, once you stop being a student, banks will charge you interest on it.
When choosing a student bank account, weigh up the different options carefully. It's better to get one with a good deal on overdrafts rather than an exciting freebie.
Sell your stuff
If you have items of value that you no longer want or need, consider selling them. This could range from clothes to mobile phones to computer games. If it's an electronic item, make sure you wipe your data.
The second step in managing your money at university is to look at what you'll need to spend and create a budgeting plan.
You may have to estimate some costs if you're heading to university for the first time. Just remember to update your estimates with your actual spending costs as soon as you can. When managing your finances, it's vital to be honest about what you spend. Students can underestimate their expenditure by as much as 50%.
It can be helpful to think of costs in two groups: essential costs and variable expenses.
Essential costs are the ones you can't do without. Often, you'll pay for these once a month or less frequently.
University tuition fees
Assuming you have a tuition fee loan, your university course fees should be covered in full. If not, you'll have to factor in a way to pay these.
Rent or accommodation costs
Accommodation will be a priority when managing your money at university (unless you live at home with your parents), as it'll take the largest chunk out of your student budget.
Some accommodation contracts may include utility bills. University accommodation may also include wifi and contents insurance. If you rent privately, you'll also need money for a deposit.
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- Student accommodation
Council tax (most students are NOT eligible for this)
You won't need to pay council tax if you live with other full-time students. You may need to get a 'certificate of student status' from your university to prove your exemption. If there's a non-student in the house, the household will become liable, but often at a reduced amount.
In Northern Ireland, students have to pay rates rather than council tax. Those on certain benefits or with parental or caring responsibilities can apply for a reduction.
Utility bills (gas, electricity and water)
These bills may be part of your accommodation contract, but if you need to pay utility bills in shared accommodation, agree with your housemates how you're going to divide them up.
Make sure bills are paid on time. Direct debit payments can spread the cost and be the cheaper option, but it means one person has to get money from the others. Ask your housemates to set up a monthly standing order to the bill payer's account for their share of the bill.
Some rental properties may have a prepayment meter for energy, which can make it easier to budget, but beware that you could end up paying more than if you pay monthly or quarterly.
Gas and electricity will be the largest cost to budget for, so when you move in, read the gas and electricity meters. You can switch suppliers even in rented accommodation. You'll need to pay the existing supplier but you can shop around to find the best tariff for you – you can choose the lowest tariff or energy from a renewable source.
Water might be dealt with by your landlord. If you're on a water meter, be careful not to waste water.
Remember to submit meter readings regularly for energy and water to avoid overpaying or underpaying. If you underpay, you'll get a large bill when you move out, and it'll be harder to settle with flatmates once they're elsewhere.
Mobile phone, internet and TV costs
Mobile phone bills can also make a sizable dent in your budget. Make sure to find the best package available as a student. If you're replacing a phone, consider buying a refurbished model from a reputable company. Buying a phone outright lets you shop around for a SIM-only contract.
Wifi is often provided for students in university accommodation. If you're in private accommodation, budget for broadband with a decent download speed. You may have to sign up to a 12-month contract even if you're only at university during term time. Contracts may include set-up fees.
If you're renting and have a TV in the house, it's usually cheaper to get a package for both TV and broadband. You need a TV licence if you watch TV, even if you don't watch BBC TV. If you only watch on a laptop (unplugged), you may be covered by your parents' TV licence.
You should have insurance for expensive possessions such as TVs, laptops, mobile phones and bikes. Contents insurance may be included as part of university student accommodation. Check your parents' home insurance too, as you may be covered by that. Avoid insuring individual items, as it'll all add up.
With the following items, you have more control over what you spend. Before spending money on something, ask yourself if there's a cheaper way to get what you need or want.
Food and drink
If you're staying in university-catered accommodation, ensure you'll make full use of the meal plan you sign up to. If you're catering for yourself, you can make savings on food in lots of ways.
Cooking can save you money if you know how to rustle up a meal from store cupboard ingredients. You can cook in bulk with flatmates or friends to save costs or throw potluck dinner parties where everyone brings a dish. If you're a novice cook, there are plenty of helpful websites and YouTube videos, such as Miguel Barclay’s #onepoundmeals.
Bulk out food cheaply with pulses. Buying dried can work out cheaper but tinned can be a lot easier and still far cheaper than meat. If you're buying meat, hit the supermarket’s reduced shelves. Check if you can freeze it first if you aren't cooking it straight away.
Branded products are generally more expensive than supermarket own brands and frozen vegetables can be cheaper than fresh. It’s always good to shop around to make your budget stretch, including making use of local markets. Try not to be sucked in by two-for-one offers unless you'll use them. Food waste is not only bad for your pocket, but bad for the environment too.
Another way to save money on food is to avoid takeaways and take packed lunches with you. 'Fakeaway' and packet lunch recipes can be found online.
For drinks, try a reusable water bottle. If the tap water doesn't taste so good, try a filter jug. Or simply put a glass bottle of tap water in the fridge overnight. Doing this will save money and reduce your plastic waste.
If you can't live without freshly made coffee, check where to buy it cheaply or learn how to make your own and take it with you in a flask.
On a night out, you could have pre-drinks with friends and switch to water once at a club. Don't overdo it – bouncers may turn you away if they think you've drunk too much, and some universities are fining students for antisocial behaviour in accommodation.
Books and course costs
Check the course information on the university website for any compulsory costs such as books, equipment or fieldwork, and budget for them.
Most courses will have a recommended reading list. Get to know your university library and look for second-hand book sales from your students' union or online bookshops. Sometimes fellow students are willing to share.
Specialised clothing may be needed on some courses. Don't forget to budget for the cost of laboratory clothes, healthcare uniforms, smart clothes for placements, etc.
Cars are expensive – between insurance, fuel and tax, the costs mount up. Instead, use public transport (rail, bus or underground), lift-share with other students, cycle or walk.
If you need to buy a bike, remember to include this in your student budget. Bike recycling schemes sell refurbished bikes for a good price. Be wary of buying second hand in case they're stolen bikes. Many cities also now offer bike hire schemes.
Check the price of travel cards in the area and add this to your monthly budget. Don't forget to budget for the cost of travelling home.
If you're going abroad for part of your course, you may be eligible for the travel grant. If you're a healthcare or medical student on a clinical placement in the UK, you may also be eligible for this grant.
Clothes, personal care and fitness
Your clothing budget can be flexible. If you like designer brands, you might be able to get them second hand or from discount outlets. Buy footwear when the sales are on. Check charity shops or set up clothes swap parties with your friends. Look online for hints and tips on upcycling or repurposing old clothes.
Branded toiletries and makeup can be expensive. Check out some beauty bloggers/vloggers for recommendations on luxury 'dupes' and budget skincare routines.
Haircuts can be pricey. Trainee or 'junior' hairdressers are usually cheaper – see if there's a local college teaching hairdressing nearby.
Gym membership may be cheaper at university. Unis will also have a variety of sports teams and clubs, though they may not be free. Otherwise, try walking or cycling – a brisk walk will save on transport costs and keep you fit. Fitness videos of all kinds can be found online, or on DVDs from a public library.
University isn't all about work – you'll have other interests you may want to pursue that come at a cost. If these are important for you, put them in your student budget.
Your students' union should offer a selection of shops, places to eat and drink, and other services at minimal expense. Keep your socialising costs down by making use of student discounts and offers for the cinema, nightclubs, eating or drinking out. If your university does big social events (like summer balls), remember to budget for them.
Some music streaming services can be used for free if you don’t mind adverts. Local public libraries often stream music through Freegal – use your library card and PIN number to sign in. If you want to keep your subscription, you'll need to factor this into your budget.
Don't forget the cost of birthday and Christmas presents, or holidays.
Savings for students
The National Union of Students (NUS) offers the TOTUM card for student discounts and proof of age. It comes with an app to keep on top of new offers, and membership is £14.99 a year.
Free discount cards include StudentBeans and Unidays, both mobile apps that connect advertisers to students.
If you're studying in England, you may need to pay for NHS prescriptions. If you have any longterm health conditions, consider getting a prescription prepayment certificate (PPC). A three-month PPC is £29.10 and is worth it if you need more than one prescription per month. Students on low income can complete the NHS low-income scheme form (HC1). Students living with parents may not be eligible, as housing costs are taken into consideration. Prescriptions are free if you're living in the rest of the UK.
Tips to manage your money
Unless you're a Scottish student studying in Scotland, your maintenance loan will likely be paid in three big instalments and it can be very easy to overspend when it arrives.
To help with the temptation, you could put your student loan in a savings account and transfer money to a student account as you need it. For larger items like accommodation costs, transfer the money a few days before you need to pay the bill or set up a monthly standing order. Setting up direct debits for essential payments will also help you manage your money.
For other costs, take your weekly budget out cash out at a free ATM at the start of each week. This way you can keep a better track of what you're spending.
If you have a credit card, keep it separate from your other bank cards and only use it in an emergency. Make sure you pay it off each month rather than getting charged.
Like your credit card, keep your overdraft for emergencies. Rather than use an overdraft, you could put a contingency fund in your student budget, and if you don’t use it, put it towards your holidays.
Remember to keep track of your finances so money worries don't detract from your studies and enjoyment of university life. There are budgeting apps you can download for free that can help with day-to-day spending and saving.
When choosing a university, the cost of living there may influence your decision. Creating a student budget helps you work out where you can afford to study.
Learning how to monitor your finances will help you feel more in control of your money, leaving you free to focus on your studies and all that university life has to offer.
Drawing up a budget means taking a realistic look at all the money you expect to come in and the costs you expect to spend it on. The aim is to balance the budget, keeping both amounts the same – or better still, having money left to spare for emergencies and savings.
Once at university, be aware of what you actually spend and how it compares with your estimated budget. If you're over budget, see what savings you might be able to make.
What to include in a student budget
It may be easier to do an annual budget, looking at the whole year and considering all likely costs from rent and bills to clothes and food.
To help, we've produced a downloadable student budget sheet. This shows a realistic monthly income and expenditure summary based on a student from England living away from home at university in the north of England. Our example shows typical costs but every student's situation will be unique, so it's essential to think about your own likely income and expenditure.
It's always better to overestimate costs and find you have money to spare. Once you've worked out your income, start by taking off your essential expenses. After that, divide the remaining money by the number of weeks in your academic year. Items like food and drink are easier to think of as weekly costs.
Our sample budget sheet doesn't include tuition fees, as your tuition fee loan normally covers the cost of your course. If you're at a private institution, your tuition fee loan may be lower than the course fees you may be charged. In this case, you'll need to budget to pay the difference yourself.
In private accommodation, a tenancy agreement is normally for 12 months. Our costs are based on the average in the north of England.
Often included in the cost of university accommodation. Costs here are based on students sharing a privately rented house.
If in halls, a student may be liable to pay a TV licence. Check whether you can be covered by your parent's TV licence.
Mobile and internet
Based on a contract. If you have a phone already, SIM-only deals offer better value.
This is often included in the cost of university accommodation.
These will vary hugely depending on your course, and may include field trips or placements. Ask about costs when visiting at open days.
Travel and transport costs
Again, these will depend on where you live, and the cost of travel home.
Student bank accounts
It's important to be able to access money while studying as an international student.
Most banks in the UK offer a student account and the services they provide are very similar. However, it's still important to research the different accounts available to find one that best suits your needs.
A number of high street banks in the UK offer an account specifically for international students. The British Bankers' Association has a helpful guide on opening a bank account for international students.
Accommodation will depend on where in the UK you've chosen to study, ranging from £6,000 to £10,000 per year.
Some of the general costs include:
- £25 to £30 – a typical weekly food bill
- £25.20 – seven-day travel card, zones 1–2, on the London underground, Docklands Light Railway and London Overground (includes 30% student discount)
- £8.00 to £10.50 – cinema ticket with a student discount
- £5 – English breakfast at a café or pub
- £2.80 – premium takeaway sandwich
Always look out for student discounts and check websites such as lastminute.com for cheap deals.
An International Student Identity Card (ISIC) also offers up to 40,000 discounts worldwide.
Travel in the UK is expensive and a 16–25 Rail Card is a good investment but a Young Persons Coach Card is cheaper.