How to manage your money at university
Are you anxious about money at university? You'll gain a sense of control by learning how to manage your money as a student. Take a realistic look at what money you have coming in, and what you'll need to spend. Estimate your student budget before going to university and 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.
In this section we look at:
- Student loan (including your maintenance loan)
- Other financial support (like bursaries, scholarships and grants)
- Money from parents (parental contribution)
- Income from work
- Bank overdraft (for emergency cash)
- Selling things you no longer need
The tuition fee loan will go straight to the university as it covers your fees.
The maintenance loan is intended to cover a student's living costs – but it is means-tested, based on your household income. Only those with a low household income are likely to be eligible for full financial support.
When household income is higher, a student may only be allowed to apply for a reduced amount of maintenance loan. The difference will require money to be found elsewhere. This might be through parental contribution, plus a part-time job or savings.
If you do not wish to give details of your household income, you can still apply for a maintenance loan.
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 will get a lesser amount. Students living in London get a higher amount (except if they are from Scotland).
Get your student finance application in early, and make sure you receive 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 receive your maintenance loan payment in your bank account shortly after you register on your course.
For more information, see our undergraduate student loans information for England, Northern Ireland, Scotland and Wales. We also have information for undergraduates from the (non-UK) EU and international students.
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 and bursaries. There are also other scholarships and bursaries which may provide financial support – see our guide on how to hunt these down. It is worth checking for other sources of financial support. Even a small amount of extra money can make a welcome difference to your student budget. Read our guide to other financial support at university.
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.
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 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.
Students often work part-time during their studies – though working during term-time may be discouraged at some universities. If you do work, make sure your working hours fit with your academic requirements and don't distract from your studies. Income from working part-time should not affect your entitlement to loans and bursaries.
Most universities have a student employment office that can help you find part-time work. Our university profiles also provide information.
Many universities offer sandwich courses. This involves a placement year or industry programme integrated into your course. These can provide great experience and are good for graduate employability. Many placements include a salary, and some may lead to sponsorship during your final year.
Holiday jobs (Summer and Christmas)
Outside of term time there are opportunities for students to earn cash and develop skills for their CV. Several organisations offer placements or internships that can be sponsored and only last for a few weeks. If you are just starting university, see our top tops for getting a Christmas job – remembering in retail, Christmas starts early!
Are you still concerned about managing your money while at university? If you think you'll need more money, consider how a gap year could boost your bank balance. Read more about gap years.
If you have saved money ahead of going to university, make sure you include this in your student budget.
It can be tempting think of a bank overdraft as money you can spend. However, it shouldn't be treated as part of your income. Once you stop being a student, banks will charge you interest on your overdraft. Instead try to manage your money by keeping your overdraft for emergency use only. When choosing a student bank account, weigh up the different options carefully. It is better to get one with a good deal on overdrafts, rather than an exciting freebie. Check out advice on sites such as MoneySavingExpert.com.
If you have items of value which you no longer want or need, consider selling them. This could range from clothes, to mobile phones, or 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.
You may have to estimate some costs if you are heading to university for the first time. To help, you can find guideline costs in our sample student budget on the next page. This is based on a student living in England, studying outside of London and not living at home.
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. You have to pay these. In some cases, you may get a fine if you don't pay on time. These are your priority expenses, and should go at the top of your list.
- Variable expenses. You have more control over what you spend. With these costs it may be easier to make savings.
Essential costs are the ones you can't do without. Often, you'll pay for these once a month or less frequently. They include:
- University tuition fees
- Rent or accommodation costs
- Council tax (most students are NOT eligible for this)
- Utility bills (gas, electricity and water).
- Mobile phone, internet and TV costs
- Contents insurance
- Assuming you have a tuition fee loan, your university course fees should be covered in full. If not, you will have to factor in a way to pay these.
- Unless you live at home with your parents, accommodation will be a priority when managing your money at university. It will take the largest chunk out of your student budget. Some accommodation contracts may include utility bills. University accommodation may also include Wi-Fi and contents insurance. If you rent privately, you'll need money for a deposit.
- See our guide to student accommodation.
- You won't need to pay council tax if you live with other full-time students. If you need to prove exemption, you can get a 'certificate of student status' from your university. However, if there is a non-student in the house, the household will become liable. Check out the government guidance on council tax.
- Students in Northern Ireland have rates rather than council tax. Those on certain benefits or with parental or caring responsibilities can apply for a reduction.
- Next, in terms of managing your money, comes utility bills. These may be part of your accommodation contract. If you need to pay utility bills in shared accommodation, agree with your housemates how you are going to divide them up. Make sure bills are paid on time. It can be worth paying by direct debit as this spreads the cost and is cheaper, but it means one person has to get money from the others. If they agree, other housemates can set up a monthly standing order to the bill-payer's account for their share of the bill.
- Gas and electricity will be the largest cost to budget for. When you move in, read the gas and electricity meters. You'll need to pay the existing supplier, but shop around to see how they compare. You can switch suppliers even in rented accommodation. Remember to submit readings regularly – you don't want to be 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. Some rental properties may have a pre-payment meter for energy.
- Water may be dealt with by your landlord. If you're on a water meter, be careful not to waste water.
- Mobile phone bills can also make a sizeable dent on your budget. Make sure to weigh up the options to find the best package available as a student. If you are replacing a phone, consider buying a refurbished model from a reputable company. Buying a phone outright allows you to shop around for a sim-only contract.
- Wi-fi is often provided for students in university accommodation. If you are 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 are only at university in the term-time. Contracts may include set-up fees.
- TV. If you are renting and have a TV in the house, it is 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. Check the information on TV licensing.
- 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 will all add up. See our guide to student insurance.
With the following items, you have more control over what you spend. Before spending money on something, ask yourself if there is a cheaper way to get what you need or want.
This section includes:
- Food and drink
- Books and course costs
- Clothes, personal care and fitness
- Other costs
- Savings for students
If you are staying in university catered accommodation, ensure you'll make full use of the meal plan you sign up to.
If you are catering for yourself, you can make savings on food in various ways.
- Cooking. If you don't know how to cook, give it a go. It can save you money if you know how to rustle up a meal from a can of tinned tomatoes, a couple of carrots, red lentils and an onion. (That's a tomato and lentil soup). You don't have to use fancy ingredients; just have vegetable stock cubes on standby.
- Keep up your protein. You can bulk out food cheaply with pulses – like sausage and chickpea casserole, chilli with kidney beans, curry with chickpeas and lentils. Buy dried lentils, as these are quick to cook, and tinned beans or chickpeas. If you are buying meat, hit the supermarket when due-date food is being reduced. Check you can freeze it if you aren't cooking it straight away. Also check you have freezer space…
- Check if it's the best value. Branded goods are expensive. Look at the price per 100g or kilogramme to be sure. Frozen vegetables can be cheaper than fresh. Two-for-one offers are no good if you aren't going to make use of them. Local markets can be good for groceries.
- Don't shop when hungry, avoid takeaways and take your lunch with you. If you're hungry you'll be more likely to impulse buy and blow the budget! If you're going out for the night, avoid buying takeaways by having something ready to eat at home. 'Fakeaway' recipes can be found online.
- Food can become part of your social life. Cook in bulk with flatmates or friends to save costs. This can also be entertaining! You could put each other up to the challenge of dining with bargain-hunted food – a bit like Ready Steady Cook meets Come Dine with Me.
For drinks, consider the following:
- Bottled water is pricey. Instead, try carrying a flask of nice, cold tap water. 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.
- Coffee. If you can't live without freshly made coffee, at least check where to buy it cheaply. Or learn how to make your own and take it with you in a flask.
- Alcohol. On a night out, you could have pre-drinks with friends and switch to water once at a club. Just don't overdo it: bouncers may turn you away if they think you've drunk enough. Also, some universities are fining students for anti-social behaviour in accommodation, so be considerate of neighbours. You really don't want a fine…
Students may have additional costs for their degree, such as books, equipment, fieldwork or electives. They can often be compulsory. Check the course information on the university website, and budget for any extra costs.
- Books. Most courses will have a recommended reading list. Get to know the library at your university, 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 required 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. See our guide to cheap travel for students.
- Bikes. 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 these are stolen bikes. Many cities also now offer bike hire schemes.
- Homeward bound. Don't forget to budget for the cost of travelling home!
- Travel grant. Students may be eligible for the travel grant if going abroad for part of their course. Healthcare or medical students on a clinical placement in the UK may also be eligible for this grant. See our guide to other financial support for students.
These are items you may need to buy – but if your student budget is stretched, consider what can be axed.
- Clothes are another expense where you can decide what you spend. If you like certain brands, you might be able to get them second hand via eBay, or from discount outlets. Check charity shops – particularly in wealthy areas. Buy footwear when the sales are on.
- Branded toiletries and make-up can be expensive. Check on internet forums if there are substitutes that are as good.
- Haircuts can be pricey – for women in particular. Trainee or 'junior' hairdressers are usually cheaper. See if there is a local college teaching hairdressing nearby. Or – if you don't mind how you'll look – try being a hair model. For guys, it can be worth investing in a set of clippers…
- Fitness. Gym membership may be cheaper at university. Universities will have a variety of sports teams and clubs, though they may not be free. Otherwise try walking or cycling – a brisk walk will save you transport costs and get you fitter. Fitness videos of all kinds can be found online, or on DVDs from a public library. Short of time as well as money? Try the 7-minute workout app, or other similar workouts.
University isn't all about work. You will have other interests you may wish 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.
- The social scene – whether it be the cinema, nightclub, eating or drinking out – can be a significant cost. Keep an eye out for student discounts and offers. Peer pressure can sometimes push you into spending money; try to find ways to compromise.
- If your university does big social events (like summer balls), remember to budget for these.
- Music is a priority for many students. Spotify can be used for free (if you can bear the adverts). It may also be worth signing up to your local public library. Some now stream music via Freegal – use your library card and PIN number to sign in.
- Don't forget to factor in the cost of birthday and Christmas presents, or holidays.
There are plenty of offers for students to save money. Avoid spending more because of them! Discount cards for students include the National Union of Students NUS extra card, with money off shopping at Co-op supermarkets. Free discount cards include StudentBeans and Unidays, both mobile apps who make their money by connecting advertisers to students.
Students who are over 18 and studying in England may need to pay for NHS prescriptions. Students on a 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 are living in Scotland, Wales or Northern Ireland, so long as they are from a doctor (GP).
Drawing up a student budget simply means taking a realistic look at all the money you expect to come in, and the costs you expect to spend it on.
What you are aiming for is to balance the budget, keeping both amounts the same – or even better, having money left to spare.
It may be easiest to do an annual budget, looking at the whole year. To help, we've produced a student budget sheet to download. On the same web page are sample costs for a student living in England but outside of London.
If you are estimating costs, it's better to overestimate and find you have money to spare. Once you've totted up your income, start by taking off the essential expenses (see above). 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 a weekly cost. Do your other estimates look realistic?
Once at university, be aware of what you actually spend and how it compares with your estimated budget. If you're off the mark, check above for what savings you might be able to make.
If you are struggling financially, take action. You don't want money worries hanging over you, affecting your studies. Speak to an advisor at your university – as well as getting guidance, you may be eligible for university hardship funds. Otherwise, see if you can pick up some part-time or seasonal work.
For most students, the maintenance loan is paid in three big instalments (Scottish students studying in Scotland receive monthly payments). It can be easy to overspend when a big lump-sum arrives in your bank account! Some students suggest putting the student loan in a savings account, and transferring 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. For the rest, a monthly standing order can be set up.
It can also help to set up direct debits for essential payments, like bills.
If you use a credit card, ensure you pay it off each month rather than getting charged. It is better to use a credit card for emergencies only, and keep it separately from your other bank cards.
For other costs – like shopping, or going out – it can be easier to take cash out of an ATM at the start of each week. As the cash gets spent, you'll have a better idea of what you've got left than if you're using your bank card to pay.
Keep your overdraft for emergencies. Even better, put aside a small contingency fund in your student budget. If you don't use this, put it towards your holidays.
There are budgeting apps you can download for free. These can help with day-to-day spending, and saving.
Remember to keep track of your finances, so money worries don't detract from your studies and enjoyment of university life! Take a look at our sample student budget.
Next page: Budgeting