Why is it so difficult?
A large bank balance isn’t always a large amount of spare money
Student finance is normally paid in instalments during the academic year.
That creates a budgeting problem.
When an instalment arrives, your bank balance may suddenly look very healthy. But much of that money is already committed to costs that you haven’t paid yet.
Imagine receiving £3,000.
It can feel like you have £3,000 available.
But if £1,800 of that is needed for accommodation and another £600 will be needed for food, travel and bills over the next few months, your genuinely disposable income is much smaller.
This is why budgeting by looking at your bank balance alone can be dangerous.
Try to divide your available money across the number of weeks it needs to last.
Your budgeting calculator can do this for you.
The start-of-term trap: Be careful during the first few weeks
The beginning of term can be expensive.
You may be buying:
- Bedding
- Kitchen equipment
- Books
- Course materials
- Clothes
- Society memberships
- Travel passes
- Food
- Furniture
- Equipment for your room
At the same time, there are often more social events than usual.
Freshers’ events, nights out, takeaways and meeting new people can make the first few weeks particularly expensive.
And because your student finance may have just arrived, it can feel as though you have plenty of money.
Try not to judge what you can afford by your bank balance during those first few weeks.
Work out what needs to last until your next payment first.
WHERE DOES THE MONEY GO?
Small spending can become big spending
Most people notice a £500 purchase.
We are much less likely to notice £3, £5 or £10 disappearing at a time.
But repeated small purchases can have a major effect on your budget.
For example, spending just £5 each day works out at around:
£35 a week
£150 a month
more than £1,800 a year
That doesn’t mean you shouldn’t spend £5 on something you enjoy.
It simply shows why regular small purchases are worth including in your budget.