By Cloe Grampa
Being a student is pretty tough, especially when money is tight, and everything is so expensive. I have been a student for the past 4 years and I am now pretty comfortable to say that I got hand on budgeting. My first advice is to forget about the 50/30/20 rule – 50% goes on needs, 30% on wants and 20% on savings – and how it is going to save you lots of money because let’s be honest such a rule only applies if you have a decent income and your primary needs such as rent and food aren’t too expensive. Living in Brighton is extremely pricey, so it is totally understandable that you end up every month living off canned beans and porridge because you have no more money to afford food. However, there is a way to be able to live kind of comfortably and it starts with being financially aware.
Step one: look at those bank statements and check out how much you spend and on what. Other than fixed expenses such as rent, bills and transport, how much do you spend on food, coffees, drinks, nights out, shopping and so on? I know it is quite a lengthy process and it might lead to shedding a few tears because realising you actually spent £100 pounds on a night out is never a nice feeling. However, being aware of where your money is going is very helpful to start realising how you are living your life.
Step two: what are the most important to you? I always found budgeting advice pretty useless, until I listened to a podcast that encourages giving meaning to your money. I started paying attention on how spending money was making me feel, there were times that I would go on a shopping spree and spend so much money and although I really liked what I bought it made me feel pretty awful afterwards. What are the things that cost money that definitely make you feel good? Is buying fresh food something that makes you feel incredible? Is going to a coffee shop to get a cup of coffee everyday something that always makes you feel calmer and happier? Keep asking yourself these questions until you find the things you spend money on that don’t make you feel good and start cutting them off.
Step three: Once you have done your maths and found what expenses are unnecessary it is time to make the actual budget. Pick a number in which you know you can comfortably live in but that doesn’t allow you to overspend on stuff that don’t bring any benefits to your life. Once you have got your monthly budget it is time to cut it down in a weekly one. So, let’s say that after my fixed expenses I don’t want to spend more than £150 a month, which means that I will have more or less £40 a week to spend. Having in mind a weekly budget I am much more aware of how I want to spend that money.
Bonus: Try transferring money on the card you use (or withdraw it) weekly so that once you hit 0 you know you need to wait the following Monday to start spending again. Being able to visualise how much spending money you have is quite important in making budgeting work.
Image credit: Pxfuel