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Overhaul Your Student Budget (in 3 easy steps)

Updated: Dec 10, 2019


By Alice Gerwat

It’s no secret that students struggle with finances – receiving loans in just three large instalments a year makes it incredibly difficult to work out how to evenly distribute your money.

Alice is a money-saving expert from Magic Freebies, and she’s here to explain how the 50/30/20 budgeting rule is a simple way to make your money go further.


What is 50/30/20?



This budgeting technique was coined by Elizabeth Warren. Warren is a bankruptcy expert from Harvard, so it’s fair to say she knows a thing or two about money woes.

As student finance comes through in fewer but larger chunks than a set monthly income, start by adding up everything you are set to receive for the academic year, and then divide it by the number of months you need to budget for. The average student tenancy agreement is 44 weeks, so that’s roughly 11 months. This will show you exactly how much you have to live off each month. If you have a job then make sure you factor in those numbers too – in the immortal words of Tesco “every little helps”!


Credit: Just Giving

Warren recommends that ideally your ‘needs’ should not make up more than 50% of your monthly budget. This includes rent, bills, travel, food, your phone contract and any other costs that you deem to be completely necessary. This category is likely to be over the allocated amount as the cost of living is only going up, so don’t be disheartened if it is above 50% at first.

30% of your monthly budget should be spent on things that you deem to be ‘entertainment’. These are things that we do not need, but simply want. Hobbies, shopping trips, gym membership, nights out – the list goes on. This is naturally the most difficult category to limit your spend on, as your student years are all about having fun as much as studying hard and getting your degree. When this category eats up over 30% of your monthly budget, it’s time to get creative with cheaper ways to have fun.

Finally, 20% of your monthly income should be stashed away for a rainy day. When graduation day comes, you’ll be feeling on top of the world. All of your hard work will have finally paid off and you’d really like to celebrate by doing something fun. Whether it’s a backpacking trip, fun unpaid work experience in your chosen profession or just taking some time to chill and figure out your next move – everything requires money. That’s why it’s so important to save.

How do I work it all out?

I know it sounds like I’m telling you to eat your greens, but keeping an Excel sheet with all of your finances really is a fool proof way to be fully in the know about where all your money goes. Check out the following example spreadsheet – as usual, the needs are grossly over the recommended monthly percentage.


With their current spending habits, this student is overdrawn by £11.50 at the end of the month. If the student didn’t have an overdraft, they’d have to sacrifice half of their backpacking savings just to survive the month.


Time to get creative

Instead of spending £30 a month on a fancy phone contract, why not downgrade a little? Unless you’re trying to become an influencer with glossy photos on your social media channels, having the latest iPhone with the best camera really isn’t necessary and it’s preventing you from enjoying the things you love and saving for the future. Why not put a potential phone contract cost in your spreadsheet? This is essentially hypothetical budgeting’ – perfect for seeing how much of a difference a cheaper option might make to your budget.


If you find you’re spending a lot on food shops whilst also spending on meals out, it might be time to reconsider what you’re buying. Why not try investing in a meal planner to keep on the fridge or in your room? Planning meals out carefully limits food waste and ensures that you get your money’s worth from your food shop. Every purchase in a food shop should be carefully considered – why not make a dummy online food shop to see how much you could be spending? Online shops are easier to do at your own pace and make it easier to take your time to decide if something is truly a good deal/ if it’s really a necessary purchase.

Consider shopping around for your household bills too – loyal customers often get the worst deals from energy companies so it pays to be pro-active and picky.

It’s not easy to assess your spending when you don’t have many funds to work with from the start, but hopefully the 50/30/20 method can help to make it a little less painful.

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