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Why budget?

When you leave home and move to university you have to quickly get used to being an adult and living for yourself. One of the most stressful day to day activities you have to learn is to budget and be careful with your money.

Food, drink, clothes, leisure activities, toiletries, travel  and books are all things that you now need to get used to buying on a daily basis, but you need to prioritise which ones you to get and when. Over spending on food, drink or clothes can leave you penniless, meaning you won’t be able to socialise with friends or pay for textbooks you need for your course.

How to budget

You only need to set aside a few minutes each week to check your finances; it’s as simple as that. Start by listing all your sources of income, for example your pay, benefits and tax credits.

Money coming in

Your pay slip

The most important thing your pay slip tells you is how much money you actually get. It also tells you how much you are paying in National Insurance contributions, income tax and other deductions, for example pension contributions, student loan repayments or work related benefits.

You can check you are on the right tax code by contacting the tax office – ask the HR department for their details and your employer’s reference number.

Benefits and tax credits

You may be eligible for state benefits, if for example you are on a low income, have dependent children or are disabled. You may be eligible for tax credits if you are responsible for at least one child or young person who normally lives with you, or you work but have a low income.

Find out what you may be eligible for by contacting the Benefit Enquiry Line on 0800 882 200 or see

Other income

You may have other income coming in from other sources, for example from, relatives, or rental income if you have a lodger and rent out a room.

You may have an income that varies from month to month, especially if your salary is dependent on the amount of hours you work or if you get paid by commission.

You may receive your money in chunks, such as student loans that are paid out at the start of each term. If so, it would be very useful to work out your average income each month.


Money going out

Now you know what is coming in, the next step is to find out how much is going out and plan your budget. Use our online budget planner at to help you. Just type in your income and outgoings and let it do the rest for you.

Don’t worry if you cannot account for every penny coming in. The most important thing is to know roughly where you stand. Keeping a spending diary can help.

Don’t forget occasional items such as birthdays, Christmas or other festive presents and holidays. Also think about other outgoings that you pay for once a year, for example car tax and insurance. It’s helpful to put these in a monthly amount for these, perhaps by estimating and dividing up the average that you would spend during the year.

Review your budget regularly. If your circumstances change, for example you get a change in pay or your bills increase, look at your budget again to make sure it’s realistic or that you are making the most of any extra income.

Managing your budget

Once you have worked out how much money you have got coming in and going out, you are in a much better position already. If you haven’t got much money left over or you think you may be getting into difficulties, don’t panic – there is free help at hand.

Whichever situation you find yourself in, always make sure you pay your priority debts, for example, rent or mortgage, gas and electricity bills and Council Tax. If you are struggling, it’s best to get in touch with those people you owe money to as soon as possible. They may be able to set up an arrangement where you can spread your payments until you get your finances sorted.

Check your income to see if there are any benefits or tax credits you may be eligible for by contacting the Benefit Enquiry Line on 0800 882 200 or see

Not much money left over?

If you find you are regularly struggling to make ends meet, you will need to reduce your spending. These tips may help.

Consider making small cutbacks on non-essential items. What could you do without that would help you get back on track?

Check the APR on your credit card or loans. This shows the overall cost of borrowing including interest and charges. Generally, the lower the APR the better the deal is for you. See if you can shop around for a better deal.

You may get a better deal by switching services such as phones, electricity or gas to new suppliers. There are various internet switching services or search engines you can use. To compare energy prices, see It has a list of price comparison services that follow a voluntary code of practice.

Alternatively, speak to your supplier. All energy suppliers must offer ‘social tariffs’ for vulnerable customers. Switching to a social tariff means you pay for fuel at the lowest available price. For information see the Energy Choices website – or contact your fuel supplier.

Getting into difficulties

If you are struggling with money or finance remember we have a finance department in the information centre which can help you through budgeting and with any access to funds or grants.

Think very carefully about borrowing more money to pay off existing debts. It could make things so much worse. Check the terms and conditions of any loan or credit agreement, such as the interest rate and length of time it has to run and make sure you can afford to pay it back. If any loan is secured to your home, you may lose your home if you cannot afford to keep up with the repayments.

If you think things are getting out of hand, try not to panic. You are not alone and there is expert help available. Several organisations offer a free service, either face to face, or by phone, for example, Citizens Advice Bureau, National Debtline, Payplan and the Consumer Credit Counselling Service.

These advice agencies can help you tackle you debts. They will help you set up a budget sheet, prioritise your debts and work out how you can live within your means.