A Uni Student’s Guide to Budgeting

July 17 2018

Author: Declan Cavanagh

Before we get started I need to say that I am also a student. Luckily, I have a job, but there was a time when my income was so small getting a coffee at uni was a luxury. So I feel for all types of students, the cashed up working kids, the youth allowance kids, and the poor university students. I have lived it all.

There is a lot of information on the internet about budgets, especially for low income earners like us. And I’m not here to tell you something new, but I surely will help you get your budget started and help keep it reasonably easy to stick to. It basically comes down to habits, keep reading to find out why.

Grab a pen and paper, literally, and write down your monthly expenses in a column titled “expenses”. Rent, fuel, groceries, internet, phone plan, netflix, gym membership, spotify, australian conservation fund, and public transport. These should be things that you have an expectation/obligation to pay each and every month. You might have a direct debit set up or an automatic transfer, these are good habits to have.

Now ask yourself “what else am I expected to pay this year?” car rego, insurance, car services, electricity, water, pet bills, and all other bills that you can think of. Total this up and workout the monthly cost. Divide by 12 for the yearly costs and divide by 3 for the quarterly costs.

Total up your monthly cost at the bottom of the page. This is what you need to spend money on to live a decent quality of life. This is what your life boils down to. If you can spend this much each month you’ll be a happy camper, and that’s what we all want right? Important note: your life is always changing, remember to do this activity periodically throughout the year. Once every 2 or 3 months is a good idea.

Now, lets jot down what our unnecessary expenditure looks like in a column titled “lifestyle”. Coffee dates, nights out, uber, gigs, pizza, lifestyle, and everything else you do with your time that costs money. This should be a shorter column than before, and should be as specific as possible. Go back through the last month’s transactions to find out more about what you spend money on and exactly how much.

We have a good picture about what our monthly costs are now. But this doesn’t help too much if we get paid weekly or fortnightly, so let’s do some more maths. Grab our monthly cost and divide by 4 to get a weekly number. I’m going to assume your weekly income is higher than your weekly expenses for budgeting sake.

Now this is where the fun part for me comes into it all, setting up a structure that will help you stick to your budget. We know what our costs are, we know how much we earn, but if we use only 1 account, how do we measure that we are on track and sticking to the budget? If we spend from the same account we receive our pay, we will likely spend most of what we get.

If you want the best result, we are going to need to open more than one transaction account and have more than one debit card in our wallet. Taking your budgeted amount out of your pay account, and putting it into another transaction account is a great way of quantifying how much expenditure you’ll have over the week.

Copying other people who are successful with money management is key here, they all have multiple accounts. Luckily as a student you don’t have to pay account fees at the major Australian banks.

Set up your accounts so you have an expenses transaction account, lifestyle account, income account and a savings account, at the very least. Now allocate a day of the week that you pay the required amount from your income account into the expenses, lifestyle and savings accounts.

Stick to this routine week to week, and you’ll easily be living within your budget. As I said earlier, it’s all about habits. If you get in the routine of using these accounts for their intended purpose you’ll be priming yourself for better money management. To go one step further, you could set up an automatic transaction so this process is automated and out of your hands.

Next, introduce a digital manager for your spending. Some banking apps are alright, but there are better ones out there. Mint, clarity money, and WLTH are a few to get you started. Check each of them out to see what works for you. All you want to do is know when you are getting close to the limit with specific purchases, and categorise your spending. The more self aware you are, the better off you’ll be with decision making.

Take all this new found knowledge and put it into a google sheet. If you want something that’s out of budget, or want help with hitting your savings goals it’s the habits you create that’ll help. Read more of our articles for more pieces like this. Share this with friends and family, let’s help each other get better with money.