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budget student loan header

How to budget your student loan

It is almost time for a new batch of students to start arriving at university and as they leave home, some for the first time, it is inevitable that new life skills will be learnt. Whether it is learning how to boil an egg, iron a shirt or tidy your room on a regular basis, university brings with it as many life lessons as well as academic.

One very important skill all students should learn during their time at university is how to budget. If you can learn how to budget your student loan and avoid debt over those three years, then you are set up for good budgeting skills for life post-university.

The main problem for many, students or not, is that they don’t know where to start when it comes to budgeting. So with that in mind, we have put together a guide on how to budget your student loan, featuring exactly what should be included within it.

Figure out your income

Here you should include:

student loans, grants, bursaries, money from parents and income from any jobs.

Try to figure out, as best you can, the money you will be receiving on a monthly basis. This will give you a better idea whether you will be able to meet your regular outgoings and have some money left over for emergencies.

Take into account essential outgoings

Here you should include:

tuition fees, rent, household bills, insurance, travel costs, debt repayments, phone bills and food shopping bills.

Most of these expenses are set at the same amount each month which makes budgeting slightly easier. For variable outgoings, try to estimate their cost or set a monthly budget until you know the true amounts, this gives you the opportunity to see how much you know about your outgoings.

If you are overspending by a little you may need to adjust your budget, however for big overspends, try to find ways of cutting back on costs in this area.

budget student loan content

Additional spends

Here you should include:

course books and university supplies, clothes and home wares as well as social activities.

These are all outgoings that are difficult to predict but should be budgeted for. From the money you have left over after your outgoings have been taken into account, you should try to form a limit of how much you are willing to spend on this sort of thing per month.

The less you spend, the better for your financial situation in the long run. If you are spending more than you are receiving, it may be time to look at cutting costs or speaking to an independent financial advisor (IFA).

Try to put some money into savings

If you can, you should try and put some money into a savings account while you are at university. It can be difficult, and saving should never stop you having a good time, but saving for the unexpected or for life after university is always advantageous.

Come up with a weekly/monthly cap for spending

By setting a monthly spending cap, it can help you to become savvier with your money. The spending cap will act as an estimate of how much you think you spend per month.

Then from this, you will be able to see if you are spending too much or there are any outgoings you may not have taken into account when you created your budget.

It is a good way to help you learn to budget and stick within a monthly spending limit, something which will be helpful later in life.

Use bank statements to keep tabs on spending and your income

Creating a budget and a spending limit is good practice but you need to see how well your budget is working and if it needs amending. Keep tabs on your spending and your income by checking bank statements as often as possible. This can help you identify any bad spending habits and anything you may need to dispute, such as if you have been overcharged on your monthly bills.

So there we have it, a guide to student budgeting that we hope will encourage you to look into budgeting your loan. Whether you are just starting university or you have already been there a year or two, creating a budget for yourself is good practice.

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