Coming to university might mean managing your own finances for the first time, making a transition from benefits to student support, or adjusting to a low income after earning wages until now. Budgeting skills learned while you are a student should stay with you and benefit you at every stage of your life. There are three key elements to budgeting. • • • Maximise your income Minimise your outgoings, Plan your spending then stick to it!!!!!
It is hard work training yourself to live on a budget, but once you have the hang of it, it should become second nature.
Maximise your Income
There is little point attempting to plan your finances and work out your weekly/monthly budget if you are not receiving all the money to which you are entitled. It will be a lot harder sticking to your budget if it is tighter than it need be. Please see the Advice and Support Centre’s booklet “Student Finance” for more detail on all the student support/benefits mentioned below. Contact the Advice and Support Centre, your Local Authority (LA) or the Job Centre to find out if you might be entitled to any of this income. Are you getting all the student support that you should? Depending on what sort of course you are studying, you might be funded from different sources, e.g. the Local Authority, NHS, Training and Development Agency etc. More information about student support is available in the booklets “Student Finances” and “Nursing and Midwifery”. If your circumstances have changed since you made your application and you have less income, or your resources are more stretched as a result, then you could be entitled to more support than you are getting. Remember, the student loan is a very cheap way of borrowing money as the interest charged is set in line with the rate of inflation so that you only pay back in real terms, what you borrow. • Dependants’ Grants (non-NHS Students)
If you have children or an adult dependant, then you might be entitled to Parents’ Learning Allowance, Adult Dependant’s Grant or Child Care Grant. NHS-funded students should receive dependants allowances through their bursary. These are non-repayable grants and are income assessed.
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Disabled Students’ Allowance (DSA)
Disabled students who encounter extra costs as a result of their disability can apply for help with these costs. If you think you are not receiving a grant to which you may be entitled then contact your LA or the NHS Student Grants Unit (SGU). • Benefits
As a general rule, full-time students are not entitled to benefits and must claim student support through the LA or NHS SGU instead. Part-time, non-NHS students generally can claim benefits as they are not entitled to any student funding. However, you may be entitled to some benefits during the summer vacation and perhaps even during term-time if you are: A Single parent Disabled Retired Part of a Student couple Part-time These groups may be able to get assistance with paying rent through Housing Benefit, Council Tax through Council Tax Benefit and with general living costs from Income Support or Job Seekers Allowance. Child Tax Credits are available whether or not you are a full-time student. You may also be able to claim Working Tax Credits if you are in paid employment. All these benefits are means-tested. For further information about benefits, see our booklet “Student Finance”. It is essential that if you are claiming benefits, tax credits or a dependant’s element of Student Support, you inform the awarding body of any changes in your circumstances. If you fail to disclose all the information about your income from other sources, you may be assessed for a higher award than you are entitled to and you will have to repay it.
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Financial help from the University
The University has two funds for students experiencing financial hardship. The European Social Fund (ESF) bursary and the Access to Learning Fund. The criteria for each is slightly different with the ESF bursary dependant on what post code you live in and what modules you are studying and ALF
having priority groups such as single parents and disabled students or those from low-income backgrounds. You should check your eligibility and make an application if you think it is appropriate. • Charities and Trust Funds
You can search the internet for charities and trust funds but be aware that it can take months to receive a decision and charities often only make small awards. When working out your budget from one year to the next, do not include any award you may have had from a charity or University hardship fund the year before. You may have been told that it is likely you will get another award this year but it is not guaranteed. Only include an award like this once you have been assessed for it. • Get a part-time job.
Your student funding is intended to cover your essential costs only. You will need to supplement your income unless you are receiving financial support from elsewhere, e.g. benefits, parents or partner. The University Workplace in MD Block, can help you find part-time work, ideally suited to students. You can check your local phone book for recruitment agencies and the nearest Job Centre and check the local paper for job adverts.
Reducing your expenditure
Once you have made sure you are receiving all the income to which you are entitled, equally important is to make sure that you are not wasting money in areas in which you can spend less. We have a booklet in the Advice and Support Centre called making the most of your money, which lists ways in which you can save pennies and pounds. By asking friends and family or using websites such as www.moneysavingexpert.com you can probably find hundreds more ideas for cost cutting.
Plan your budget
Identify your costs A budget planner is an easy way to control your money, but remember it needs to be revised constantly to reflect changes in your circumstances and remain accurate.
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Be realistic and do not be too optimistic about what you can achieve.
There is no point in setting yourself a budget that you cannot stick to. You may have to cut down on one element of expenditure to afford another but work out what you can realistically cut back on. For instance, do not tell yourself that you will walk instead of getting the bus if you know that you hate walking. You will just end up getting the bus and will not have budgeted for it. If you know that your study is going to be intensive this year, do not budget based on more hours paid work that you might actually be able to do. Budget on the worse case scenario and enjoy the extra money if you manage to maintain more hours. • Think about what you need and what you want.
There are lots of things in life that we have become used to, and going without them seems like hardship. Especially when we can see other people, including fellow students, supposedly managing to afford them. We do not all have the same income and we do not all have the same financial commitments. PLUS some of those people you see enjoying a more affluent lifestyle than you might be funding it by borrowing credit from banks or retailers. If you budget smartly, you may not have everything you want for a few years but you will be in a far better position to afford them when you finish university because your wages will not be spent repaying debts. Keep asking yourself the question, “Can I do without this item?” and you will get into the habit of making sensible spending decisions. • Do not be swayed by other people including friends, relatives or creditors
Once you have prepared a realistic list of your costs, do not let someone else tell you to change it. Other people may have their own agendas, e.g. the bank to whom you owe money wants paying back regardless of your other financial commitments*. Well-meaning friends and relatives may
offer their own budgeting tips and advice. Some of it may be useful but they have different needs and desires than you and your family. What works for them may not for you. *If a creditor is demanding you pay more than you can afford each month, please seek debt advice from us immediately as we can offer help with debt management and negotiate with creditors on your behalf. The budget planner Your budget planner must list everything you spend money on if it is to be accurate and possible to maintain. Make an entry for whatever it is that you do to relax and have fun. The idea is not to stop doing the things you enjoy because they cost money, but to plan your spending so that you can pay for them. Plan for the unexpected Your budget planner can go wrong when something out of the blue happens, for instance you are sick and unable to work, the T.V. blows up or the washing machine breaks. If possible have an “other” entry on your planner. Some weeks/months you may not use it and the money might accumulate for when you do need it. It is unlikely that you will be able to accrue any significant savings while you are a student but even small ones mean less spent on credit cards or borrowed from elsewhere when things go wrong. If you have no choice but to use a credit card because you need to buy something expensive urgently, then you can use the money in your “other” entry to make repayments and keep the interest charged to your credit card down. When deciding how to organise your budget planner, e.g. weekly/monthly/termly, there are several things you need to consider. • How do you receive your main source of income? Student loantermly, wages-monthly, benefits-weekly. How do you pay your bills? Quarterly, by Direct Debit monthly, payment book weekly.
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You cannot change how your income comes to you but you may want to think about alternative times and ways to pay your bills according to when you receive your main source of income. The point is to make sure that you have as much control over your finances as possible and not let your bills and other financial commitments control you.
Student Budget Planner (copies available from the Advice and Support Centre and at www.wolvesunion.org) INCOME WEEKLY/MONTHLY £ £ £ £ £ £ £ £ £ £……………………… WEEKLY/MONTHLY £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £ £………………………. Disposable income £……………………….
HE Grant Maintenance Loan Maintenance Grant Parental Contribution Earnings Benefits Tax Credits Maintenance Other Total A EXPENDITURE
Rent/Mortgage Gas Electricity Water Telephone Council Tax T.V. Licence Food Household Expenses Books/Stationery Travel Contents Insurance Life Insurance Clothes Childcare Maintenance Debts Social/hobby Other Total B Total A – Total B=
If you have moved out of your parents’ home for the first time or have just moved to a new area or property, you may not be sure what figures to put in the planner after you have completed the set amounts such as rent and T.V. Licence. Until you have adjusted to your new circumstances your budget planner will have to be revised regularly so do not worry about being exact with your figures to begin with. It is probably going to take you a few weeks if not months to get it right, and as long as you have been realistic with the amounts for each item on the planner, you should not end up overspending too much in this period. The National Union of Students’ quotes these figures as average spending for students: Gas, electricity and water £15 per week. Food/housekeeping £25-30 per week Clothing £8 per week These figures are based on a single person, so if you have a family you should amend them accordingly. If you would like some assistance with your planner or ideas of how much to insert for other areas of expenditure, then please feel free to contact one of our advisers. Once you have compared your income with expenditure, if you are left with a minus figure then your budget may need adjustment. You could even still be missing income to which you are entitled, so double check or seek advice. If you feel that you have done everything you can to make this budget break even, but ends simply will not meet, then make an application to the Access to Learning Fund and ESF Bursary. If you are full-time it may also be worth investigating whether there might be financial benefits to transferring to part-time study. Sticking to your budget There are two tried and tested ways to stick to your budget. • • Use cash (bearing in mind personal safety) Write down what you spend
If you stick to the first point you may not need to use the second, but until you have adjusted to your budget writing down what you spend may be a good way of training yourself to think about what you are spending and why. (You may even wish to spend a few weeks doing this before you formalise a budget planner).
If you use a card to pay for your day-to-day purchases you are more likely to lose track of how much you are spending. If you have withdrawn however much money your planner says you need on a particular day/week, you will be aware of what you are spending as you see it disappear. However, do not carry around or keep in your room large sums of cash that might be stolen. If you do not want to use cash for security reasons then writing down your expenditure each day is essential. Keeping in mind what you have spent and what you have left to spend is the key to making your budget work. Advice and Support Centre staff are here for help and advice on the issues discussed above or any other queries. We can be contacted on 01902 322038 or by email on advice@wolvesunion.org. We are open 9.30 am till 5pm.
If you have debts and would like some assistance dealing with them, please make an appointment to see us. Also refer to our booklet “Student Debt”.