Top tips for managing your money
Learning to manage your money is just like every other life skill. You aren’t born being able to do it and, just like many other things in life that are worth learning to do, it takes practice. It will therefore be no surprise that you may need help and support and you may fall off that virtual bike a few times before you get the hang of it. With this in mind we thought we’d put together these tips for getting you started.
Important! We are not going to tell you what to spend your money on; that’s for you to decide. Our plan is to give you advice about what you will need to pay for at University, point out some of the common pitfalls to avoid and also give you some handy tips for survival.
The most important tip is draw up a budget!
What is a budget? Noun: An estimate of costs, revenues and resources over a specified period, reflecting a reading of future financial conditions and goals.
In other words, a budget is a record of what money you have coming in compared to what you need to pay for or spend. Note: we use the word ‘need’ here. You do have to decide what you need to spend money on rather than what you’d like to spend money on. For example, rent is a need as it is essential if you don’t want to get evicted, while socialising is a want.
For your budget to work you need to be realistic, and the budget also needs to be fairly flexible and regularly reviewed. By realistic we mean you need to remember to factor in things such as birthdays, haircuts and trips home and all the other things you really spend your money on, and not just rent and food. By flexible we mean it can be changed each day or week as things change (and things do change all the time).
Flexible also means that if you overspend one week you can change your budget plan the next week.
You can create a budget sheet online, on a spreadsheet or even on the back of an old envelope. The important thing is to actually do it. You will never be in control of your money if you don’t know how much money you have actually got. You may want to ask someone to help you with it just because you may not have done it before.
You may like to try budgeting tools such as those provided by the National Debt Line and Money Saving Expert.
Look online for budgeting tools and useful apps to help you manage your money
Use two bank accounts and ‘pay yourself’ each week
Your student funding is paid to you in three huge instalments and it is up to you to be disciplined enough to pay for essentials (such as rent, food, travel etc.) and make the rest last until the next loan instalment. No wonder students get in a mess sometimes; do you know anyone else that gets paid in this strange way? Doing the maths of the budget is one thing, but sticking to it is another skill that may take a bit longer to develop.
- One way to overcome the temptation of spending too much too soon is to pay for essentials (such as rent or travel) once your loan arrives and then see how much you have left
- You should then divide this by the number of weeks until you receive the next instalment. This is how much money you have to live on each week: if you overspend one week you need to cut back the next
- You can then pay this amount into your other account each week to live off
Make sure you have swapped your bank account over to a student account – shop around for the best deals.
Learn to cook
Yes really! This may not sound like a money saving tip but if you always buy takeaways, convenience foods or ready meals, apart from the damage to your waistline, you are in effect paying someone else to cook for you (or chop your veg)!
Cooking for your flatmates is economical and fun (especially if someone else is doing the washing up)
There are lots of useful online resources and videos that will show you how to make easy budget meals, such as from BBC Good Food and Jamie Oliver.
- Offer to cook tea for your flatmates and they will hopefully reciprocate
- Try to ‘feed your flat for a fiver’ (or even a tenner), which is a good way to make friends and learn a new recipe
Beware of ‘scarily’ expensive events – remember you don’t have to spend money to have fun
Halloween is quickly approaching and after this we have Bonfire Night and then Christmas; life is a series of potentially expensive events that, if you are not careful, can see you spending too much money that you will subsequently spend weeks trying to recover from.
You can still make the most of these events on a budget:
- Remember that you don’t need a new outfit for every activity. Homemade is often just as good as shop bought and you can get bargain fancy dress outfits in charity shops and supermarkets
- Swap don’t shop if possible, as it is good for the environment as well as your wallet
- In all cases work out how much you can afford and stick to it
Look for free things by using your NUS card and make sure you take advantage of the exclusive offers for LJMU students.
If you want help with your budget or any other aspect of your money, talk to us. We won’t judge you; we are here to help.
Student Advice has a money drop in every weekday in Aquinas, Maryland Street, Liverpool, L1 9DE. Call us on 0151 231 3153/3154 or tweet @LJMUfunds
