Beginner’s guide to budgeting

Have you just received your maintenance loan and now it’s burning a hole in your pocket? Spending more money on takeaways than on your bills? If you want to learn how to make your money last until your next top-up, explore our beginner’s guide to creating a budget that works for you, and master money management with our simple steps!

Worried about your money? Understanding your money, how to budget, how to make more of your money and knowing what to do if things are going wrong are essential skills for life. Check out our links and guides to help keep your finances on track.

Why should I budget? It sounds boring…

Budgeting may sound boring, but it can be the difference between slipping into your student overdraft or managing to save some money for a trip away with your pals.

By tracking how much money you’re spending, how much money you have coming in, and seeing where you can make some sacrifices, you’ll feel in control of your finances. And you might even be able to start saving for a rainy day!

Sounds good — how do I budget?

By following these 4 easy and quick steps!

1. Incomings

First, you want to make a note of all your ‘incomings’ — that is money coming in to your bank account.

This includes things like your maintenance loan, grants, wages from part-time jobs, bursaries, money from your parents, etc.

2. Fixed outgoings

Next, calculate your fixed outgoings — this is what you spend (money going out) on necessities that you can’t live without.

For example, your rent payment, any bills (if not included in rent), direct debits like your phone contract, food shops, transport and so on.

Got them all? Onto the next step!

3. Variable outgoings

Variable outgoings are things that we love but could definitely live without, like nights out, takeaways, that edgy vintage jumper and other treats.

If you’re worried about your spending or just want to save more, cutting down your variable outgoings is the best place to start!

These expenses can be tricky to track, but as a rule of thumb, if the spending isn’t incoming and it’s not fixed outgoing, it’s most likely variable outgoing.

4. Calculate your budget

Now you’ve got everything you need to calculate your budget. Your total incomings are all in one place. Then, add the fixed outgoings to your variable outgoings, and voila — you have your total outgoings.

Finally, take your total incoming and subtract your total outgoings.

If there’s any money left over, that’s money you can save for an emergency (or that holiday in the summer!):

Incomings of £300 — Outgoings of £230 = £70 (you can put this into a savings account).

If there’s no money left, or if you go into the negatives, that means you’re spending more than you’re earning:

Incomings of £300 — Outgoings £330 = -£30 (you have higher outgoings than incomings).

If you’d rather not do the maths yourself, there are some great, free budget calculators you can try like Save The Student rent calculator and UCAS budget calculator.

What next?

Happy with how much money you’re saving? Great, keep it going!

If not, remember — taking the time to budget and seeing where your money is going is just the first step to mastering money management. If you’re in the negatives or you just want to save more than you already are, don’t worry — there’s plenty of ways to make changes and get support.

Here are three things you can do:

1. Reduce your variable outgoings

The first thing to do is to think about any variable outgoings you can reduce. Can you try eating fewer takeaways, spending less on booze and clothes, or using public transport instead of spending loads on fuel? If the answer is yes, make some small sacrifices — you’ll be grateful for it.

2. Increase your incomings

Can you increase your incoming? Our cost of living hub has plenty of information on how you can apply to additional funding, bursaries or even find a part-time job.

3. Seek support

If you’re not sure what to do, you’re facing financial troubles, or you just want some advice, we’re here to help. Visit our cost of living hub to find people to speak to and learn what you can do if you are in financial worry.

Useful budget trackers

You can track your budget weekly or monthly, depending on the type of budgeter you are. Whilst weekly may be more time-consuming, it means you’re less likely to blow all your money at the start of your budgeting period and be left with less at the end of the month!

Tracking your budget is easy enough using an Excel spreadsheet. Or, if you want to go digital, try out these free budget trackers: Goodbudget and Money Dashboard.

Other handy blogs

Want to check out more blogs to help you master money management?

Check out the 3 money saving websites and apps every student should know about. Also, learn how Plus Programme Holly managed to get through University on an extreme budget.