‘MAKE SURE YOU BUDGET YOUR MONEY WISELY!’ – what everyone’s parents, aunts, uncles, nan & everyone in between tells then when they head off to Uni. But if you either: haven’t had a significant income before or had money but never needed to worry about making it last or how to spend it wisely then the chances are you won’t be entirely sure on how to budget your money effectively.
In my first year of Uni I attempted to budget but would end up spending more than I had budgeted for each month…Constantly. Seeing the big figures in my bank account got me too excited and led to me getting carried away with many, many, many ASOS orders. Thus, leaving me very deep into my overdraft by the beginning of Summer (which thankfully I managed to pay off through a Summer job).
This year, I have managed to budget a LOT better which I think is down to experience but also down to a banking app called Monzo (This isn’t sponsored, I just genuinely love the app a lot, and tell everyone I know about it so I thought why not tell everyone on here too!).
With Monzo you are able to separate your money in to several different cards (like piggy banks) for different things. Personally, I find it best when I create a separate card for each month and put my monthly budget into each one and then extract it when that month arise’s. You have to have the self restraint not to take any money out of the other months cards otherwise you may end up overspending and end up struggling in your final month or going into your overdraft. In addition, I have a separate card created for my rent which I never touch to ensure that no matter what I will definitely be able to afford to pay rent.
So… How do you work out your monthly budget???
Your student loan gets spread over the year in 3 instalments. There are probably many blog posts out there with different ways of budgeting but I’m just going to share the way that works for me. I like to focus on one instalment at a time and work out how to spread that amount over the period before you get paid the next one.
Money Coming In
– Student Loan
– Bursaries, Scholarships etc.
– Money from parents
– Savings you want to spend
Money Going Out
– Bills (e.g. gas, water, electricity, WiFi, Netflix, Spotify, Phone)
– Travel (e.g. bus pass, train tickets, car insurance, petrol)
– Occasions (e.g. birthdays, Christmas)
– Big Purchases (e.g. laptop, bike, holiday)
– Hobbies (e.g. society joining costs)
– Self Care (e.g. haircuts, makeup, skincare, toiletries)
– Socialising (e.g nights out, cinema)
Calculate Monthly Budget
Begin by subtracting the ‘set/one-off money going out’ total from the ‘money coming in’ total. You will then be left with a sum of money for spending on ‘other’ things such as: food, socialising, hobbies, self-care & clothes. Finally, take this number and divide it by the number of months you need to spread it over until you get your next Student Loan Instalment to give you your monthly budget.
Like I mentioned earlier, I create multiple cards within the Monzo app to see how much money is going to be spent on rent, bills and my monthly budget etc. The app also enables you to set your monthly budget and plan how much you want to spend on different categories (food, self care, socialising etc.) in order to stretch your budget over the month.
The app also has a tracker to illustrate whether you are on track to stay within your monthly budget. It turns green if you are on track or orange and then red if you have been spending too much and are likely to spend your budget before the month is over.
Hope you found this helpful, and couldn’t recommend Monzo enough to help you budget your money! Obviously rent, bills and food are very important but make sure you budget in some money to have funnnn and don’t stress about money too much!