Welcome to the world boys and girls- learning to manage your money by yourself is often one of the most challenging things a new (or old) student will face- and by no small coincidence also one of the most ignored challenges – ignorance is bliss comes to mind! But throughout this weekly column, I am going to attempt to convert you all into thrift kings and queens- Macklemore style! …
Okay so let’s not be too ambitious! Whilst I don’t expect you to immediately relinquish all luxuries and live on a diet of bread and water, it is vital to realise that a few careful foresighted steps can help you save money without huge sacrifices, as this new weekly column will show you! So naturally, the first step for a healthy bank balance is… BUDGETING!
The beauty of budgeting is, if you do it properly (and try to stick to it) you are set for the year! By pre-empting income and costs, you will hopefully avoid nasty shocks, as well as being able to give yourself a figure to stick to. Another great thing about budgets is that when properly done, you may even end up with some surprise extra cash. The key is to overestimate your spending, so that as well as being on the safe side of your bank, you may end up with a bit of extra cash to treat yourself with.
So let’s learn how to budget, with seven easy steps, Blue Peter style:
You will need:
– an idea of your yearly income (e.g student loans, generous parents, part time jobs
-an idea of your rent for the year (bear in mind if your bills are included or not)
-an idea of your bills for the year
1. First of all, subtract the total of your yearly rent and bills from your yearly income
2.I know this may not be the most popular idea, but try to also set aside another £100-200 for big unexpected costs (e.g. if your laptop breaks)
3. Make some estimations for some of the ‘big’ costs you may incur, which won’t happen every month:
– text books/ study material
-deposit/admin fees for houses
TIP: always overestimate, you’re bound to discover another birthday/ costly textbook (which will probably remain unread)
4. Subtract all of these ‘big’ one off costs from the yearly figure so far.
5. Divide this new yearly figure by twelve. This is now your monthly figure
6. Make an estimate of how much you might spend on food a month (if you shop wisely, it should be between £20-30 a week)
TIP: it may be helpful to have already drawn up a weekly shopping list
7. Take the food figure off , and what you have left is yours to play with!
Now comes the tricky bit- sticking to it! Later on in the series, we will talk about making budget swaps, and cutting costs to give yourself extra dosh- watch this space…
Here are some useful budgeting websites, which do all the hard work for you: