Heading off to university is a major life change in more ways than one. It's likely not much happened to you between the end of high school and the start of university; you may not even have had a birthday. But you're now that you're an undergraduate, you're expected to know how to manage every aspect of your life as though you've done it all your life.
Maybe this is your first time away from home, out from under your parents' direct supervision. How are you supposed to 'manage' your first taste of freedom? What will you eat and who will wash your clothes? And the most important question of all: how are you supposed to manage your money?
We don't want to take too much away from your new experiences. A part of the fun and reward of stepping into your adult life is finding out what works for you, stressful as that may sometimes be. But there's one area that students themselves say they wish they had more information on: managing money. On that topic, Superprof obliges.
Making the Case for Budgeting
All over the world, university students have said they wished they had learned about financial literacy while still in high school. According to Finder, 44% of survey respondents believe schools should teach students how to manage money. This lag in learning leaves young adults unprepared to deal with real-world situations. It causes many financial missteps that often turn into tough life lessons.
University students have a lot of expenses; sometimes, it will feel like somebody has their hand out everywhere you turn. School tuition and lab fees, books and study materials, fees for joining clubs, joining the gym and parking on campus (if you drive). But you want to enjoy your freedom! Go shopping and out to eat, experience the nightlife and maybe even date.
You can do all of that if you make out a budget and stick to it - that's the important part. Planning how you'll spend your money may sound dull as dishwater, like just the thing to stifle your newly-gained freedom. In fact, it's the opposite. Knowing exactly what you have coming in and how much of it will go out lets you figure out what you can do with the rest.
Planning how to save money as a student gives you peace of mind, knowing you'll have money for everything you need and most things you want. You'll be able to see whether you have enough cash to see you through school or if you need to apply for uni scholarships. You may even consider taking on a part-time job to meet your financial goals.
Setting Up a Budget: The Basics
Ideally, students should start planning their university budget while still in high school. They won't know exactly how much things will cost because costs vary from year to year. For instance, it's a sure bet that tuition, dorm fees and books will all be higher by the time they enter uni. Still, they can get an idea of how much money they'll need to get by.
Pro tip: if you are still in high school, you should be planning your uni budget and saving money as soon as you decide on a university education. You might get birthday money or a bit of cash for doing chores around the house. You may mind the neighbour's kids, walk their dogs or mow their lawns to earn a bit, too. If you're academically gifted, you could tutor younger students, help them with their homework or prepare for exams.
Not all is lost if you're a bit behind the planning curve but the sooner you get started, the better off you'll be. Even if you're in your first year at uni, you can set up your budget. In fact, you're even better positioned to do so because you know how much everything costs. And if you have a university exchange program on your horizon, it's best to start your financial preparations as soon as possible.
First, list all the money you have coming in: when it hits your bank account, where it's from and how much it is. Consider every source, even allotments from your parents, if you get them. Other possible sources of income include part-time work, scholarships, grants and bursaries, student loans and monthly allotments from your savings account.
Next, list the things you have to pay for the same way - when, where, and how much. Your accommodations and utilities - electric, gas, water and broadband should top the list. Next, you'll have tuition, books and school supplies; insurance, savings, and food; and your mobile phone bill. Other costs you may have include student club dues, parking fees and car maintenance costs.
Once you have everything listed, you only have to tally up the two columns. If your income is greater than your outflow, you're golden - you can start investigating how to save money as a student. If those tallies are a bit too close for comfort, you'll have to find other revenue streams because so far, we've only budgeted for essentials.
Budgeting pro tip: set up a monthly budget even if your scholarship, bursary or grant money comes in one lump sum at each semester's start. Dividing your lump-sum income into monthly amounts is far easier than multiplying your monthly expenses to match your thrice-yearly payouts. It leaves less room for budgeting errors, too.
How to Save Money as a Student
So far, we've covered essential costs students pay at uni. Now, let's get into what else you might spend money on, things like haircuts and hobbies. For instance, you might subscribe to a streaming or gaming service. You may want to enjoy a night at the cinema or theatre, visit an amusement park or join a gym.
All of these things and more fall into the 'nice to have' category. Should you have to cut expenses from your budget, these are the ones to axe. Even the money you spend on haircuts could be reduced. You might also lower your clothing allowance and buy personal hygiene supplies - also considered non-essential, by shopping at discount stores or buying off-brand.
You don't have to stop going out but you should set a limit on how much you'll spend. You may dedicate as little as $20 a week to spend on entertainment. With your student discount, you could still have a decent time as long as you're careful. Your student discount should help you save on transportation and maybe things like museum tickets, too.
Every term, you'll have to buy new books but you don't have to buy them brand new from the campus bookstore. The student union or campus bookstore might have a used book exchange; if not, see if you can find a copy online. Also, once you're done with your books, you can sell them to get a bit of your money back. So go easy on the highlighter and margin notes; try not to mark them up too much lest you lower their resale value.
Finally, there's food. Eating out and ordering in should fall under your entertainment budget; your food allowance should be strictly for the food you prepare at home. The same goes for treats from the coffee shop. If you're pulling a long study session at the library, bring a thermos from home, and some snacks, too. One of the top tips for first-year uni students to follow is avoiding vending machines; pumping coins into those slots is the best - or worst budget wrecker.
Other Budgeting Don'ts
Having a credit card for emergencies is a wise idea; declaring a late-night pizza binge an emergency is not. Unfortunately, credit card spending is one of uni students' greatest financial mistakes. It feels nice to have the buying power to get whatever you want in the moment but those bills come due very quickly. If you must use credit to pay for something, be sure you have room in your budget to pay the bill as soon as it's due.
The point of budgeting isn't just to help you make sound financial decisions, it's to help you achieve your financial goals. Whatever your aims might be, one of them must be transitioning into post-university life with minimal financial insecurity. Should you luck into a paid internship, put at least half of your earnings in your savings account; don't list that portion in your budget. Failing to save money is one of students' biggest budgeting fails.
Failing to set financial goals is the cause of most budget failures. Contrary to popular thought, saving to spend - on a holiday or to buy something pricey, is not good financial planning. Set yourself a goal of having X amount of money in the bank by graduation, for example. Or make it your goal to save at least 10% of your income every month.
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