How to make a student budget

Ruth Bushi

Ruth Bushi writes about student money and university life. She's the author of several editions of The Student Money Manual.

It’s natural to feel financially unsettled by recent challenges such as changes to the cost of living and the pandemic. Making a budget can help you feel more confident in managing your finances.

It can show you what you have to work with, and how to get through tough times. Even having a go can lighten some of the stress of money worries.

What is a budget?

Simply put, a budget is a plan for how you want to spend your money. If you ever run out of your student loan or struggle to make ends meet, a budget can help you get back on track.

Making a budget usually involves deciding how much to spend on things that are important to you – for instance rent, food and socialising. Planning these in advance is a great way to stay on top of your money.

This is especially handy if you face unexpected costs or a drop in income. Budgeting makes sure you don’t overstretch yourself and it can help you prioritise your spending.

Budgeting doesn’t take any complicated maths or special equipment. Follow the steps below to build a budget.

Step 1: Choose where to make your budget

  • You can make a budget on a piece of paper or in a notebook. This is a quick way to get started. It can help to keep a calculator to hand.
  • A spreadsheet program like Excel is a good option if you want to save or update your budget and the software can even do the sums for you.
  • There are also loads of interactive budgets you can use online or by app such as this Money Advice Service budget planner.

Step 2: List your monthly income

List the money you have coming in each month. This might include:

  • Student loan
  • Wages from a job or self employment
  • Bursaries or grants
  • Welfare benefits or disability allowance
  • Parental contribution
  • Hardship funds and other emergency support

You may get some of this income in one-off or bulk payments. Divide these by the number of months the money has to last to work out a monthly figure.

Once you’ve got all your income sources, add up the amounts. This is your total monthly income.

Step 3: Track your monthly spending

Think about how much you spend (or need to set aside) for:

  • Essential costs: things you have to pay regularly or can’t easily skip, such as rent and bills. Your essential costs might also include transport to work, or course materials.
  • Flexible costs: spending that fits around your finances. For example, socialising, hobbies and snacks on the go.

Not sure what you spend? Check bank statements and receipts, as well as any banking apps or digital wallets you use. Or use this breakdown of student spending to jog your memory. It’s also fine to use estimates.

Add up your spending for the month. This is your total monthly spending.

Step 4: Balance your budget

The goal is to spend less than your income each month.

You can check this by subtracting your total monthly spending amount from your total monthly income.

  • Do you have money left over? Consider putting it in a savings account each month to build your own back-up funds.
  • Struggling to get by? Don’t panic. Read the steps below.

Putting your budget to work

Pick a regular date to go through your budget. The start or end of the month is a good idea, but you may want to check in a bit more often while your finances fluctuate.

Pay essential costs first. Or put the money aside in a safe place or (even better) a separate account until bills become due. If you have any income left over after essential costs, divide this between your flexible costs. But don’t just spend as you go. Set limits for each cost and try not to pay more than that each month.

I was great at making budgets. If ever my financial situation and stress began to creep up, I would sit down and enthusiastically make a beautiful, colour-coded budget. After I made it, I would feel so much better and relaxed. However, I wasn’t always good at sticking to my budget.

Tackling problems

The cost of living might put on extra pressure and you might sometimes find your essential costs are greater than your income or funding.

Start by reviewing what's in your essentials list. It's normal to see the things we enjoy or appreciate as essential, but try taking a step back. Is some of this actually desirable but not essential?

  • Takeaways and ready meals are quick and easy, but relying on them will cost more than making your own from scratch. Not confident in the kitchen? YouTube has loads of no-fuss recipes you can cook on a budget.
  • A car can feel like an essential, but maintenance and MOT adds up. Public transport, walking or even car share schemes are often cheaper.
  • Find ways to spend less, switching to cheaper brands is a good start.

If you’ve checked this and still have more essential costs than you have money coming in, make an appointment to speak to someone at your university. Many universities have support funds for students who experience financial hardship and can provide you with expert advice to tackle money worries, especially debt fears.

You can also find practical ways to deal with accommodation and other tricky costs in what to do if you have money problems.

Keep going

Your budget doesn’t have to be perfect on the first go. Like anything, it gets easier with practice.

Once you get the hang of it, give yourself a money goal. This might be about building up your financial security or working towards a balanced budget at the end of each month. If you have enough income, you may want to pick something to save for. It could be an emergency fund or a treat to reward you for your hard work.

Decide how much to set aside each month. Or challenge yourself to cut back on unnecessary spending, and funnel the savings into your goal instead.

Money goals give you a sense of direction and encourage you to keep going, and really, that’s what budgets are all about.

Page last reviewed: November 2022