How to Calculate Your Student Budget
Whilst calculating a budget might seem like a complicated affair, it all boils down to a simple comparison of your income and your outgoings for the year. As a student with a limited income and a whole host of living expenses, it is particularly important to work out a budget. Follow these simple steps to find out how you are fixed financially and catch any problems before they arise.
Note Down Your OutgoingsFirstly, you should make a list of all your outgoings – that's whatever you spend your money on throughout the year. From ballpoint pens to birthday cards, make sure you have it all covered. Calculate and jot down the amount that you spend on these things over the course of a year. Your university tuition fees need not be included, since these are usually paid directly to your university on your behalf, using your tuition fee loan. Below are some examples of categories that you might consider when calculating your outgoings.
- University expenses: textbooks, stationary, library costs, photocopying and printing, trip fees
- Food: meals, snacks, eating out, kitchen equipment, pet food
- Living expenses: rent, utilities, mobile phone costs, internet, landline, child care, cleaning materials, and other living expenses
- Professional services: dentist, optician, hairdressing, beauty or grooming treatments, vet
- Entertainment: going out, alcohol, cafe drinks, cinema, film rental, CDs and DVDs, concerts and gigs
- Travel: local travel, long distance train or coach journeys, holiday travel, car payments, petrol, licensing, insurance and maintenance
- Clothing: new items, repair, laundry, dry cleaning
- Charity Contributions: charity gifts and donations
- Gifts: birthdays, Christmas etc.
- Personal hygiene and care: hair products, body care products, make up, vitamins
- Loans: credit cards, personal loan payments and fees
- Other: gym membership etc.
Summarise Your IncomeThe next step is to summarise your income. Again, don’t include your tuition fee loan as this will bypass you, going directly to your university. Here are some examples of sources of income:
- Student loan
- Scholarships and grants
- Contributions from family members
- Wages and tips
Do Your SumsNext, add together all your outgoings for the year, to find a total. Then, add together all your sources of income. Finally, subtract your outgoings for the year from your yearly income. You will be left with either positive or negative sum. A positive number indicates that, by the end of the year, you are on course to have some money left over. A negative sum shows that, if you spend according to your predicted outgoings and your income is as estimated, you will be out of pocket by the end of the year.
If your calculations see you set to be in the red by the year’s end, it’s time to make some changes. Have a think about your options. Do you need to set up a student overdraft facility as a safety precaution? Could you find more work over the summer or in the evenings? Could you replace that gym membership with regular runs round the park? Could you get a bike to minimise your travel costs? Tweak at your budget to make it work for you, with the aim of at least breaking even by the end of the year.