Joslyn Carine
Budgeting for Students Joslyn Kemp
Personal Finance

Budgeting for Students: A Guide

Budgeting can be a difficult task for anyone, but it can be particularly difficult for students who are living alone for the first time and needing to provide for themselves. During my first year living away from my parents, I often found myself in the situation of running out of money far too quickly in the month, and either having to ask my parents for a little extra cash (which was something I did not want to do) or having to stretch out the little I had left by buying cheaper items and eating the same meal several times a week.

My second year living alone ended up being short-lived as I moved back in with my parents at the start of the Covid-19 lockdown (which I naively believed would be only a few weeks) and ended up staying with them for the rest of the year. So, at the beginning of 2021, I decided I needed to get a better handle on my personal finances as I was nearing the time where I would have to fend for myself completely.

I am in a fortunate position where my parents pay for my education, living expenses, and provide me with a monthly allowance to pay for necessities such as petrol and groceries. So, I decided I would focus the money that I earned on gifts for family and friends, outings out in my free time, and padding my investments while money wasn’t an issue for me.

Please don’t get me wrong, I am very aware of how lucky and fortunate I am where I don’t need to earn an income to provide for myself. However, I have used the money my parents give me to improve my relationship with money and to build better habits on where I spend it. So this, after such a long introduction, is my guide to budgeting and sticking to it.


How to start budgeting:

Step 1:

First, you need to identify all (and I do mean all) expenses you may incur in a month. This means, groceries, petrol, haircuts, clothing, textbooks, stationery, etc. Identify a realistic amount that you spend on each category and lay them out so that you can see what you will need to spend in each month. I personally use Excel as I find it easier to use, but I know many people who use a notebook or a piece of paper on their fridge to track these expenses.

Step 2:

Take the amount of money you have available each month (whether it’s from a salary, bursary of from your parents/sponsor) and put that at the top of your document. This amount is now the maximum that you can spend in a month without putting any aside for saving and investing.

[Now I know the priority as a student may not be to put away money for the future, especially as this can feel like you are missing out on that money now. There is an economic theory (one’s Marginal Propensity to Save) that explains this scenario as the opportunity cost an individual has to face: whether to spend the money now and feel immediate satisfaction or to invest it and reap the rewards (interest) at a later date. I will speak more about investing and saving as a student in a later post.]

Step 3:

Taking the sum of your expenses, deduct those from your monthly income, and identify what you have left. If you haven’t budgeted for leisure activities, perhaps that is where you can spend that excess. I like to keep the excess as a cushion should I go over my grocery allowance, or if I need extra petrol in a month. If you have been generous enough in your assumptions that you are unlikely to go over your allocations, you may even decide to put that money away for the long-term or in a short-term savings account in case a month comes up where you need extra cash flow.

Now, many people may go through the whole process of budgeting and may stick to it for a few months before eventually forgetting about it and slipping into old habits. This is an exercise that requires you to adjust your behaviour towards spending until it becomes second nature. I will admit, I do slip up sometimes, but because my attitude and understanding of money have changed over the last year, I can find myself (somewhat) easily going back to my good habits.


Tips for sticking to budgeting:

First, remember you are human, and as humans, we are prone to making mistakes. So, if you do go over your budget during a month, identify why you did and see if you can’t adjust it for the next month. For instance, if you find after 3 months you are spending more than you thought you would on groceries, but you have barely had to buy petrol, adjust your amounts for the next month and see if it is easier to stick to it then.

I try to budget via categories in order to stay accountable. So if its towards the end of the month and I don’t think ill need to buy groceries, but there is money in my bank account that I could use to buy new clothes, I ignore it. I told my sister once that my bank account is a resource, and my budget is a tool. Meaning, I don’t look at my bank balance to decide where I spend my money, I look at my spreadsheet and see where I am almost at my limit r where I could maybe splurge a little.

Finally, remember to try to have fun with it. Personal finance can be difficult and sticking to a budget is a tricky thing when you have varsity, work, social life, and more to deal with. So, if there is an event I am looking forward to where I will inevitably buy food, I try to be a little more frugal in the month/s leading up to it to build a cushion for that event. So that may mean not buying the snacks I want or buying cheaper alternatives. This can seem taxing until you reach that event you were looking forward to and realise you could order yourself a nice meal because you have enough money set aside for it where that meal won’t be your last for the month.


My final thought for this post: getting a handle on your personal finances as a student can be tough but trying and messing up is better than not trying at all. I hope this helped!

Until next time,

JC x

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