The best ways to budget, according to university students

When studying at university, you’ll need to cultivate many life skills as part of adapting to living independently.  

One of these skills is budgeting. To learn more, we discussed the importance of budgeting with two students: Yasir Kidwai, who studied at the Tata Institute of Social Sciences in Mumbai, and Brian Chumbi Junior who is an international student at the Liverpool School of Tropical Medicine in the UK.  

They told us about how they budget and the advice they would give other students who are trying to manage their money better. 

The cost of living and the importance of budgeting 

“Developing budgeting skills should probably be as important as developing one’s studying skills,” argued Brian, who emphasised the role budgeting has played in his university experience. 

With the cost-of-living rising all around the world, budgeting has become an essential part of most people’s lives. Even basic living necessities are becoming harder to buy and maintain.  

Yasir said that, while studying at university, “the primary challenge has been to find affordable housing to settle in the vicinity of the campus” and “the second challenge is to get healthy and cheap food.”  

With the prices of food and housing constantly rising alongside the increased prices of university fees, students will often find themselves struggling to afford the essentials if they are not diligent in monitoring their bank accounts and frugal in their spending. 

Budgeting methods 

There are many ways to budget, each with its own pros and cons. Using a spreadsheet or budgeting app to identify all the areas where you spend, assign a budget to each category and record each transaction can be a useful way to ensure you're not overspending in a specific area.  

This is the most precise way of keeping track of your money as you can easily see how each transaction fits into your budget. It also allows you to see how small, seemingly insignificant amounts can add up and so it is ideal if you're learning to budget for the first time. Another way to save money is to manage your shopping habits and consider how and where money can be saved when making a purchase.  

This method is used by Brian as he recommends “discount apps like StudentBeans, Unidays and Trainline” to make sure he’s getting the best price possible.  

He also advises that students “Get [membership savings] cards to use in shops [...] to get discounts on several groceries.” These savings can all add up and result in a natural reduction in spending without having to cut things out. Budgeting as an international student 

Budgeting is particularly important when studying abroad as you may not easily be able to contact family for financial support. Also, university fees tend to be higher for international students, squeezing your budget even more. 

It is therefore recommended to accumulate savings as early as possible; ideally before arriving at your study destination. You should always have enough money to be able to return home in an emergency. In Brian’s experience, he was most struck by the difference in prices between the UK and his home country. “Before coming to the UK, I could usually buy my lunch every day, and it was manageable. In the UK, I realised that it was too expensive and not affordable.”  

While eating out or buying food from a supermarket or small shop may be common and affordable in one country, in others it is not. This is also relevant for students coming from a small town to study in a big city; prices are higher, and this must be factored into your budget. 

Universities and financial support 

Universities will often try to support their students in any way they can. Yasir had an incredibly positive experience with his university: “My tuition fees have been waived due to my financial condition [and] the college gives aid to students with [low] annual family income.”  

This provided him with more peace of mind while studying as he was not accumulating debt and did not have the pressure of expensive tuition fees on top of his regular living expenses. Advice for other students 

When asked if there were any ways his university could better support students financially, he said that “the campus should be completely residential.” Living in close proximity to your university lectures and classes can help cut costs, as you haven't got to worry about the cost of travel each day. However, not all universities offer accommodation on campus.  This may be something you want to consider when applying to university if you have limited financial resources.  

Brian agreed, advising students to “double-check the distance from your accommodation to the university 

"When looking for accommodation, make sure it's all bills inclusive, otherwise you may end up paying separately for other bills like gas, water, electricity and [council tax].” This, again, prevents unexpected essential expenses from arising. 

Despite his preparations, unexpected costs did arise. “Consider laundry costs. At the student halls I was staying at, we were paying for the washer and dryer every time we did laundry.” 

“Plan in advance all of your expenses, savings and emergencies and open a bank account as soon as you can.” Finally, he warns against overspending on non-essential items: “From my experience, I encourage preparing home-cooked meals, as they are more affordable than buying. 

“Also, if you don’t mind Primark [a budget clothing shop], chain stores have probably the most affordable clothes.” 

He emphasises that in a world where everything is getting more expensive, students, who generally have limited finances, should track their spending habits, save for emergencies, and make good spending decisions wherever possible. 

Frequently asked questions 

What is the 50 30 20 rule? 

It is a basic budgeting principle that advises you to spend 50 percent of your income on essentials, 30 percent on non-essentials and put 20 percent towards your savings every time you get paid. 

It is best applied when you have a regular monthly income so is trickier for students to use who are receiving student loan payments per semester or term. 

What are five top tips for budgeting? 

• Track your income and outgoings 

• Always spend less than you earn 

• Find ways to save money by shopping in cheaper stores 

• Focus on paying off any debt before saving or spending excessively on non-essential items 

• Use technology to help manage your budget wherever possible 

How do you budget as a student? 

Using any of the methods mentioned above will help students to budget and save money. For students who are learning to budget for the first time, it is important that they know how much money is coming in, how much they need to spend on essential expenses, and how much they have left.  

What are the four steps to the student budget? 

A student’s budget can be split into four categories: 

• Essential expenses (such as accommodation, utilities, transport, food, water etc.) 

• Non-essential expenses (leisure time and personal items) 

• Emergency fund savings (money that they can use to support themselves if there is a problem with their usual income) 

• A student loan repayment fund