Jul 01 – 2023

5 Best Budgeting Tips for University Students in 2023

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Budgeting in university can be a daunting task to embark upon. Many students I have met can’t face looking at their expenses from the previous month, let alone budget for the future. Budgeting may seem like a waste of time because most of your friends aren’t doing it. Of course, being oblivious to your spending is more comfortable in the short term.

The truth of the matter is that what gets measured gets managed. Taking the time in your week to sit back and analyse your expenses will give you the information needed to make better money decisions in the following weeks, and this will extrapolate to the rest of your life.

Here are some tips on budgeting to help you.

1. You spend more than you think. You should budget more money than you expect.

In my experience, most people I have met highly underestimate how much they spend a month. People don’t understand how much things add up over time. It is important to put this expectation into your budget.

I believe you should do so that you can feel free to spend money on all the exciting and unexpected things that happen in your life. Like the spontaneous meal or sports game that you went to. Instead of cursing at the extra expense, you can have confidence that you can afford these exciting adventures.

2. Track everything.

Make sure there is a section for everything. Get more specific. All your categories should be visible and not just amass together.

By singling out each one of your subscriptions and monthly payments. Such as rent and utilities, it will make for a much easier time to see all the cracks and inefficiencies. I have implemented this in my own life, and it really does show all the good and the bad. I would highly suggest writing down everything in a notebook, excel spreadsheet or a budgeting app. This will make you more aware in the short term and help you down the road.

3. Start by tracking your expenses for a month and then use that shell to make a budget.

If you start by tracking your expenses, then you don’t set unreasonable expectations for yourself. My first advice would be to go through a month where you either spend as predicted or completely overspend. This will give you a better idea of how much you are spending.

It’s easy to look at the end of the month figure as big as it is, but it may be more difficult to analyse what you spent where. By doing that you will see even more gaps and then be able to create a realistic budget for yourself the next month. The goal is not to cut your expenses in half the next month. You want to gradually see things that can be avoided and start to see your monthly expenses decrease each month until you can get to a figure you can manage.

4. Use a budgeting app.

A budgeting app automates your expenses into different categories. You would have had to do it manually on Excel otherwise. You can get a more in-depth overview of what you spend on different items, and we can make better money decisions. Great budgeting apps include Mint or Emma. They show your income versus expenses every month in a user-friendly format. There are goals that you can achieve if you stick to your budget.

I often hear about young adults thinking about tracking their money as a chore as it’s not very flashy and cool. These apps liven up the experience. You are trying to allow our money to make more money by investing in yourselves for the future. The first way to get there is to reduce expenses, save the extra cash and then put it towards assets that you know will give you an ROI (Return on investment).

5. Pre-emptively budget the nights out, instead of looking at the damage the following day.

This is one of the craziest things. As young adults, we know how expensive alcohol and nights out can be, but we hate to admit it. How many times have you woken up from a night out, checking your bank balance with anxiety to see that you spent too much on overpriced drinks? We’ve all fallen into this trap. And there is an element of fun when going out and being carefree, not when it affects your money.

My recommendation for this one is to go out with an over-estimated expectation of how much you will spend. If you think it will be £50 then budget £70. Doing this it takes the pressure off your shoulders, and you know you have worked for this enjoyment and time away from the grind. You know you have the money to spend, and you probably won’t even hit your limit. On the contrary, if you go into it anxious about spending too much you will have a terrible night either being careless or closed off to new experiences. We must budget in our good times.

Good times with our friends cost money and we don’t want to be oblivious to that. Understanding the value of the money we make when we are young is the first step to financial freedom.

Conclusion

This is all very new to you. Budgeting and tracking your income and expenses can seem like a daunting task. I encourage you to look at it in a new light with the hope that you will take control of your financial life and have time to do everything you want. Setting the foundations in this early phase of life is new and exciting. I know you will reap the rewards in the future. Happy investing!