Student budgeting: make your money go further as cost of living crisis bites

For many young people, going off to university is the first time they have had to properly manage their own finances. Ensuring that your money (in particular your maintenance loan cash) stretches as far as it needs to, so you’ve got enough for all the essentials and for the fun stuff such as freshers’ week, is often a challenge. However, this year, because of the cost of living crisis, it could get seriously tough.

In July, a National Union of Students poll of more than 3,500 university students found that 11% were using food banks because they could not make ends meet – up from 5% in January. Meanwhile, the vast majority said they were cutting back as a result of soaring prices and bills.

“The cost of living crisis this year is set to make the gap between government support and living costs even higher, and the strain on students to save and make money is going to be the worst we’ve seen in years,” says Jake Butler, a money expert at the website Save the Student.

“While I still hope the government will seriously consider the support available, there are things students can do in the meantime in order to keep themselves financially afloat during a difficult start to the university year.”

Here are some of the important things to consider when it comes to getting yourself in the best possible place financially.

Budgeting – the top tips and tricks

“It may sound boring but setting a budget is the number one thing you should do if you’re looking to survive financially at uni,” Butler says.

You need to know what’s coming in, including your total loan, any wages from part-time work and any financial help you are getting from your family, and then set realistic limits on your outgoings – from bills and food to books and beer.

If you are not sure how much you are likely to spend on different things, there are some good online tools out there such as the Which? student budget calculator, which lets you put in your university and get an idea of average monthly living costs, broken down into lots of headings – from accommodation, transport and mobile phone and internet to food shopping and going out and eating out.

Your living costs could be slightly higher during the first term because of books and equipment you need to buy, items you have forgotten to bring and paying for freshers’ week events.

Some experts say that the easiest way to keep track of your outgoings is to have more than one current account.

Start with a specialist student bank account to take advantage of the interest-free overdraft, which can be up to £3,000.

Some students will have already sorted one out but if you haven’t yet, it is worth knowing that according to Save the Student’s 2022 student banking survey, Santander is the most popular bank among students.

Manchester University campus Alan Gilbert Learning Commons in 2017
Jake Butler of Save the Student says ‘the strain on students to save and make money is going to be the worst we’ve seen in years’. Photograph: Mark Waugh/Alamy

Many of the accounts come with freebies: for example, Santander offers a four-year 16-25 railcard allowing you to save a third on rail travel in Great Britain, while HSBC is offering £100 cash.

You could use this account for your loan and then set up a standing order (or manually siphon off smaller amounts on a regular basis) to channel money into a second bank account that you use for your day-to-day spending and bills.

It is so much easier to stick to a budget if you pay yourself, say, weekly rather than trying to work out how much you have got left while staring at a balance of perhaps thousands of pounds.

Meanwhile, if your favourite pub or student bar accepts cash, consider leaving the contactless card at home, as you will then only be able to spend what you have on you.

There are lots of apps that can help

Some may feel that an app-based bank such as Monzo and Starling, where you can allocate your budget to different pots or spaces, is the best bet. You can even lock Monzo pots to add in a layer of friction. You will be able to add cash to the pot but not withdraw it until the date you have set (perhaps the day your rent is due). You can disable the lock if you change your mind and need the money sooner but it means you will think twice.

Meanwhile, HyperJar lets you sort your money in digital “jars”. It offers a card that you can link to any jar, and lets you share jars and limit or block spending with shops.

Splitwise is an app designed to help groups keep track of spending and lending. It makes it easier to split the bill after dinner and could be used for bigger amounts, such as making sure all your housemates are up to date on their payments, so you don’t find yourself out of pocket.

The Monzo website on an iPad, shot against a wooden table top background
With Monzo you can allocate your budget to different pots. Photograph: M4OS Photos/Alamy

The Money Dashboard app may also be a good option for students as it allows you to set up a budget quickly and link all of your accounts in one place.

However, there are lots of other budgeting and money apps on the market, including Plum and Emma. Plum says its budgeting features and bill comparison tools help keep costs down so people don’t overspend. Emma offers similar features, allowing people to set budgets and track payments, etc.

It is worth comparing the different apps available to make sure you are using the best one for you.

Accommodation – your biggest cost

Accommodation is going to be your biggest expense while you are at university.

Most students opt to stay in university accommodation during their first year, and some unis have a dizzying array of options. However, it recently emerged that as a result of a range of factors, some new students are being forced to accept accommodation in neighbouring cities because their own university’s student halls are full.

In terms of costs, Save the Student’s 2022 accommodation survey found that the average weekly rent for uni accommodation was £147, while for private halls it was £151, and for a property that has a private landlord it was £153.

Parents helping fresher students move into halls of residence in Birmingham
Most students opt to stay in university accommodation during their first year. Photograph: Ian Canham/Alamy

Meanwhile, the estate agent Knight Frank said last month that it looked at properties in 15 of the most popular student towns and cities, including Glasgow, Sheffield, Liverpool and Bristol, and found that in 80% of cases, the overall average cost for an individual in purpose-built student accommodation was lower than for a room in a shared house within the wider private rented sector marketed at students.

It is worth being aware that at many universities it has become common practice for first-year students to try to sort out their second-year accommodation during the first term.

Meanwhile, some students concerned about the cost of accommodation are finding it is actually cheaper to book a night in a budget hotel.

MoneySuperMarket crunched the numbers and worked out that if you don’t have to be on campus every day, you could be better-off booking two or three nights a week in a cheap hotel than paying for halls. For example, Travelodge boasts of “rooms for £32 or less”.

Jo Thornhill at MoneySuperMarket says: “Looking at the average cost of student accommodation in comparison to average Travelodge prices, there are some savings to be made for those students who aren’t required to be physically present at their university campus every day.” She says the site found that one of the most financially rewarding regions for switching to hotel accommodation was London, and adds that students in the capital with five or fewer days at university may well be better off paying for a hotel than student accommodation.

Always ask for a discount

As a student you rarely have to pay the full price. Halls often have broadband included but if not, search for a student deal with a rolling or shorter contract. Virgin Media, for example, offers cheaper packages for those with an .ac.uk email address.

Students get Spotify Premium free for three months, then £5.99 a month rather than £9.99. You can get a free six-month trial of Amazon Prime Student, and then pay £4.49 a month.

Providers such as EE and O2 offer students 20% off mobile contracts. Students can sign up for Office 365 Education for free.

Meanwhile, you don’t have to pay council tax if your property is occupied by full-time students.

A close-up shot of the logo representing UNiDAYS app icon
You can find student discounts on UNiDAYS. Photograph: M4OS Photos/Alamy

You do need to pay for a TV licence but if you stick to streaming on your laptop you can avoid it.

Sign up to sites including UNiDAYS and Student Beans, which list dozens of discounts. For example, UNiDAYS’ offers include £10 off a £75 Ikea spend, while Student Beans’ deals include a 15% discount off full-price items at Asos.

The Totum card (the new name for the NUS extra student discount card) boasts hundreds of offers. If you have a local Co-op Food, it will let you get a 10% student discount in-store. Simply show your card at participating stores when at the till.

Carry your student ID and ask everywhere you shop – they may not advertise the discount widely, so it is worth checking at the till. This includes entertainment venues. Many theatres offer bargain tickets for students: seats for £5 or £10 are not uncommon.

You can also get friends and family to collect cashback to support you. The Funds4Uni scheme lets you earn free cashback towards university costs when you (and several members of your family) shop online at thousands of sites including Amazon, Trainline and John Lewis.

Seek out cut-price groceries and leftovers

Download apps such as Olio and Too Good To Go to hunt out food that local people, or businesses, cafes and restaurants, sell cheap or give away in your area.

It might be anything from fancy sandwiches nearing their sell-by date that can no longer be sold, to a glut of green beans from a neighbour’s allotment, or the contents of their fridge that would otherwise go to waste because they are off on holiday.

Other useful apps include Shopmium and CheckoutSmart, where you take a picture of your supermarket receipts in return for cashback. Occasionally, this is as much as 100% on special items, so you might get lucky with free ice-cream or a tube of Pringles.

Sandwiches/meal deal offers in a Tesco store
Look for yellow-stickered items in supermarkets. Photograph: Islandstock/Alamy

Trolley.co.uk is a supermarket comparison app that allows users to check which shops have the lowest prices. You can sign up for live discount alerts when prices change, compare prices across chains, and organise your shopping list by where is cheapest.

When you are at the supermarket, pick up yellow-stickered items, then make good use of your freezer.

The BigOven app has a “use up leftovers” function that could help students trying to be thrifty with their supermarket shopping. Users can enter up to three ingredients, and the app will recommend recipes based on those foods. That allows you to use up the odds and ends left in your fridge before they go off.

Before stocking up on any kitchen equipment, plates, bowls, etc that you might need and which are not already there, find out if your hall-mates want to share. There are only so many cheese graters one kitchen needs.

Meanwhile, nights out are a big part of the university experience for many students but costs can quickly mount. The Dusk app, which operates in London, Brighton, Manchester, Birmingham and Liverpool, lets you earn points to be traded in for free drinks and other discounts.

Most universities offer hardship funds for students who need additional financial support. Some of these are loans but often you can be given money you won’t have to pay back. Never suffer in silence.

“I’d always recommend getting in touch with your university if you’re in serious financial trouble,” Butler says. “They are harder to come by than they should be but there is funding out there that’s in place to help those most in need.”

There are also scholarships, bursaries and grants available from everyone from charities and special interest groups to employers and professional bodies looking to attract smart graduates.

Courteney Sheppard, the head of customer contact at Ucas, says: “There are different eligibility criteria based on your course, your university or your personal circumstances, so it is worth doing some research. You may find out you are eligible for something you didn’t expect.”

Funding may be based on need but some scholarships or bursaries are about rewarding academic ability or excellence in another area, such as music or the arts, or targeted at students from particular regions, backgrounds or marginalised groups. For example, at the University of Roehampton, up to 20 cash scholarships of £1,500 a year are available to those who demonstrate aptitude in esports (AKA competitive video gaming).

Turn2us (a charity that helps people in financial hardship to gain access to charitable grants and other help), the Scholarship Hub and Ucas are all useful resources, as well as your university.

Recent graduates offer their top money tips

Kenzie Bennett, who recently graduated with a law degree from the University of Sheffield, says: “My university held sales for kitchen utensils that had been left behind by the previous campus tenants.

Rear view of a student sitting at a desk studying in the library, Llanbadarn campus, at Aberystwyth University, in 2013
Make use of university libraries, which may have online copies on their site, to save money on textbooks. Photograph: aberCPC/Alamy

“They were selling pots and pans for as little as £2.50. If you can find a sale like that at your university, definitely attend, especially if you’re an international student and can’t transport kitchen utensils to uni before you start.

She adds: “Textbooks are expensive but a lot of universities have online copies on their library site.

“Only buy textbooks if you really need them and the book will transfer over multiple subjects. If you do need to buy a textbook, have a look and see if the previous edition works for you – they’re much cheaper. Use Google Books and Google Scholar for specific chapters of books and textbooks.”

Ayesha Shakeel, a recent graduate of City, University of London, says: “Collect as many coupons for food as you can from university in the induction week. During induction and university open days there’s lots of freebies – freshers should aim to get as many as possible, so when they are short on cash they don’t sleep hungry.”

She added that “apps such as UNiDAYS and Student Beans have great discounts”.

Ellie-Mae Smith, who graduated from Bangor University this year with a degree in marine environmental studies, said freshers should prioritise setting a budget.

“I’d suggest setting a budget each week, depending on what your loan is, and only spend money out of that in terms of grocery shopping weekly, with personal treats such as clothing and clubbing coming out of external funds – and, on that note, to get a part-time job where possible, as the money comes in handy.

“I’d also suggest trying to find ways of finding wanted items such as clothing for cheaper prices, such as secondhand, charity shops or even clothes swaps between flats and friendship groups.”

Additional reporting by Jess Clark