• >
  • Guides>
  • A personal finance guide to student budgeting

Student budgeting and cost-cutting tips

If you’re starting or returning to university in September, here are some tips to help you keep your costs down before, during and after your studies.

Students walk and talk using mobile devices in university

As things change rapidly during the coronavirus (COVID-19) crisis, this guide will be updated regularly to reflect changes in rules and regulations.

While coronavirus has caused disruption to those at university this spring and summer, September may see students return to universities across the UK. 

Here are some things you can do to keep your costs down and make your cash go further while you’re studying and after you’ve graduated. 

1. Getting ready for university

 Apply for your student loan 

Where you choose to study and which of the four UK nations you’re from will determine how your undergraduate course is financed. 

If you’re resident in England or Wales you can get a student loan from the UK government to cover the cost of undergraduate tuition and some living costs.  

This is a very unique type of loan, and does not typically impact on your credit record. 

The Universities and Colleges Admissions Service (UCAS) has a handy guide explaining how student finance works depending on where in the UK you’re from and where you’re looking to study. 

Prospective students from England, Wales and Northern Ireland can get a student loan to study anywhere in the UK.  

Students from Scotland studying in their home country will have their tuition costs paid for by the Scottish government, and can receive loans like their English, Welsh and NI counterparts to study elsewhere in the UK. 

English and Welsh students

If you’ve not done so already, apply for your student loan by going to Student Finance England’s website. Meanwhile students from Wales need to request a tuition fee loan from Student Finance Wales

Scottish students 

Students from Scotland need to apply to the Student Awards Agency Scotland (SAAS) for their student finance options.  

If you’re a Scottish student applying to do a degree in Scotland, you can typically get your tuition paid for by the Scottish government, but you will still need to apply to SAAS to get your course costs covered.

Students from Northern Ireland 

Students from Northern Ireland will need to apply to Student Finance Northern Ireland. The costs of tuition at public universities in Northern Ireland are capped at a lower rate than for courses elsewhere in the UK.  

UCAS has more details on how student finance works for students from Northern Ireland.

The Student Loans Company (SLC) is the government body that provides tuition fee loans to students across the UK. They have detailed guidance on their website for students set to start university in September, as well as for returning students

The SLC has said that, despite the disruption caused by COVID-19, it will process student loan applications as quickly as it can and it does not expect any delays in the process. 

People in a range of different circumstances can apply for student finance, including mature students, and students who are estranged from their families.  

The exact nature of the financial assistance you can receive as a mature student will vary compared to student finance for those who have more recently finished secondary school. 

If you are under 25 and you are not in touch with your family, you can apply for a loan as an estranged student. 

StandAlone, a charity supporting those who are estranged from their families, has partnered with the SLC to create a guide for students in this position who wish to apply for student finance

Preparing for university 

Budget for your living costs 

Setting and sticking to a budget makes sure you do not spend more than the money you have coming in - this is especially important if you need to survive off a single student loan instalment each term.

If you can resist splurging cash on things you do not need it can keep you out of financial trouble and maximise what you can do with your money.

We have a free budget planner tool to put you in control of your spending. You keep track of your loan instalments and your regular outgoings in one place. You can save your budget plan spreadsheet and return to it at any time.  

Download (PC)

Download (Mac)

You may also want to make use of our ultimate student budget planner, which helps you budget for all aspects of your student life. It helps you keep track of everything from personal spending, household costs, transport and nights out.

Saving money before you start university 

Savings rates are not great right now, largely due to the Bank of England Base Rate being at record lows. However, it’s never a bad idea to put money aside, particularly to cover unexpected living costs. 

A good way to do this is to open a savings account. Even putting a small amount away each month can make a difference further down the line. 

Learn more about how different types of savings accounts work and compare savings accounts

2. While you’re studying 

Getting a student bank account 

Many large high street banks offer current accounts just for students. These accounts typically offer services like more generous overdrafts than standard current accounts, freebies and other perks. 

Read our guide on how to find the best student account.

Overdrafts for Scottish students

Students at Scottish universities can start their courses aged 17. But by law, banks cannot lend money to anybody below the age of 18. So they will not be able to offer you an overdraft if you’re below that age.  

If your student account offers you an overdraft, it’s worth noting that your overdraft will only be interest-free for a limited time, although most last for several years. 

Many student accounts change into a ‘graduate’ account when you finish your course, but most will still offer a free overdraft. This could give you enough time to get a job and pay off the amount you owe. 

If you have not paid it off before then, you will pay interest on the amount you owe. 

You can check how long each account's overdraft is interest free for, using our student bank account comparison

Some bank accounts aimed at students may also offer great freebies like free student railcards, gift vouchers and cash rewards for opening the account. 

Student discounts and perks 

Many high street retailers, restaurants and entertainment venues offer discounts to students. Some only require you to prove you’re a student, by showing your National Union of Students (NUS) card.  

Meanwhile, others will only offer you a discount if you are part of a discount scheme, like StudentBeans, Unidays and Totum.  

Paying your bills 

If you live in halls of residence, most bills are usually included in your rent. Some student houses will also include all bills in the rent you pay. 

Although this can sometimes work out more expensive, it does at least make budgeting pretty straightforward.

If you will live with others and have to pay your bills separately, work out exactly how you will split and pay the bills in advance to avoid falling out.

There are a range of smartphone apps you can use to split your bills and keep track of who owes whom, and how much. These include Splitwise and Splittr

Broadband, phone and TV

Do not just look for the cheapest package you can find - find one that covers everything you need, whether that is all the sports channels, free minutes to phone home or a decent broadband download limit.

If you will only be in your student house for 9 months, look for deals that offer a shorter contract, in case they are cheaper than having to pay for an entire year. 

Use our student broadband comparison to find the cheapest internet deal that suits what you need.

Utilities

Unless it is included in your rent, you will have to pay for the gas, electricity and water you use.

As well as picking a cheap supplier for each, you can save money by limiting how much you use and submitting meter readings to make sure you are not paying for more than you are using.

For some tips on how you can save, read our guide to cutting your utility bills.

TV Licence 

This is a bit of a fiddly one, but the short answer is mostly yes. 

The law says you need to be covered by a TV Licence to do any of the following: 

- Watch or record programmes as they’re being shown on TV (on any channel)

- Watch or download any BBC programmes in iPlayer-

- Watch or stream programmes as they are being broadcast on online services like ITV Hub, All4, YouTube, Amazon Prime Video, Now TV and Sky Go 

This applies to any device you use to do any of these three things, including a TV, desktop computer, laptop, mobile phone, tablet, games console, or digital TV box.  

If you have a TV in a communal room in your halls of residence, you’ll need a TV Licence. If you also have a TV in your private room then you’ll need to get a separate licence for that one too.  

A quirky loophole in TV Licensing rules means that you do not have to pay for a TV licence if these three things are true:

- Your out-of-term address (e.g. your parents’ house) is covered by a TV Licence, and

- You only watch TV content on a device that is powered by an internal battery, and 

- Your device is not plugged into an aerial or mains electricity while you’re watching  

A standard TV Licence costs £157.50. You can pay in one go, or you can spread the cost over the year by Direct Debit. If you don’t need your licence for a full 12 months, you can apply for a refund. 

Full details on how to pay for a TV Licence

Council tax 

If everyone in your house is a full-time student, you will not need to pay any council tax.

However, you will need to apply for exemption from council tax if you get sent a bill for it - you can do this on the GOV.UK website.

Use your rent payments to build a credit history 

If you live in a rented house or flat, you can also use paying your rent as a great way to build your credit record.  

Credit records show your financial history and are used by all sorts of companies and financial services providers to determine your eligibility for credit and loans in the future. 

This can be a great help later on when you are trying to get a new phone contract, rental agreement, or credit card. It can even help you when you’re applying for a mortgage. 

Read more about why credit records are important and what they mean for you. 

Free apps like Canopy and CreditLadder help you build a credit history by logging your rent payments with credit referencing agencies Experian and Equifax.  

Working while you’re studying 

A part-time job while you are at uni can top up your finances, as long as you can find a healthy balance between studying, working and enjoying student life.

You only have to start paying income tax and National Insurance if you earn more than a certain amount. Your employer should not deduct tax from your pay if you earn less than the current limits:

- If you earn less than £1,042 in an average month, you will not need to pay income tax on your wages

- If you earn less than £183 a week, you will not need to pay National Insurance

If you study in the UK during term time, but you have a holiday job abroad, you’ll need to pay UK tax on everything you earn above your personal allowance

You can find out more about how students who work part-time are taxed on the GOV.UK website

Learn more about tax codes, and what to do if you think you’ve paid too much tax.

Benefits 

If you’re a student with a low income, you may be eligible for extra financial support beyond any student finance and maintenance grants you may receive. For example, you may be able to apply for Income Support

Students with disabilities may be able to get extra financial help via the Disabled Students’ Allowances (DSAs). DSAs can help cover some of the extra costs that arise from mental health problems, long-term illnesses or any other disability. 

For example, DSAs can help cover the cost of assistive technology, (like note-taking software) or extra travel costs linked to a disability. DSAs do not need to be repaid and you can receive them on top of your other student finance. 

UCAS has detailed information on how to apply for DSAs and what kind of help these payments can provide. 

Full-time students with childcare responsibilities or other dependents can also get extra financial assistance. These include: 

Childcare Grant

Parents’ Learning Allowance

Adult Dependants’ Grant 

Medical, social work and teacher training students can also access additional grants to cover certain costs. For example, travel to a medical or training placement. 

You can find out more about extra support available to students on the GOV.UK website.

 Further help 

If you find yourself in a difficult financial situation while you’re studying, you may want to get in touch with a student money adviser. Your university may be able to put you in touch with an adviser. 

Alternatively you can find information on how to contact a local adviser via the National Association of Student Money Advisers (NASMA) website

3. Once you’ve graduated

 Once you’ve completed your studies you may be looking to enter further study or to begin working.

Postgraduate student finance  

You may be able to obtain a Master’s loan from the government to cover the cost of postgraduate courses. The way you apply for this kind of loan will vary depending on where you normally live. 

Here are the relevant details for each of the home nations:

England

Scotland

Wales

Northern Ireland

Selling your old course books

Some universities offer the ability to sell course books you’ve bought over the course of the year to other students who may be interested in buying them second hand. The website Save The Student! has some handy tips on how to sell your used course books online.

Understand student loan repayments

The way student loan repayments work will vary depending on which repayment plan you are on. You will either be on a ‘Plan 1’, ‘Plan 2’ or Postgraduate loan.

The rules vary again if you studied in Scotland, but you usually live in any of the other three home nations. 

If you are from England and Wales and you began your undergraduate course after 1 September 2012, you will be on a Plan 2 repayment plan. If this applies to you, you’ll begin paying off your student loan when you earn over £26,575 per year, £2,214 a month, or £511 a week. 

The Money Advice Service, a government-run organisation that provides advice, guides and online tools to help you manage your personal finance, has a detailed guide on how loan repayments will work for you

Get the right bank account for you

As mentioned earlier your student bank account will usually turn into a ‘graduate’ account once you finish your course.  

The bank will often start to reduce how much of your overdraft is interest free each year. When the free period ends you will start paying interest on the amount you owe. 

It’s worth checking how your existing student account will treat any overdraft options you have, and how they change after you’ve finished studying. You can continue to use your student account after you graduate or get a new student account that offers a better overdraft.

You may also want to get a new graduate account with a different bank if you want one with better features, such as:

- If your account no longer offers an interest free overdraft

- If it offers an interest free overdraft that will end soon

Some banks let you switch to their graduate accounts up to three years after you finish your course.

For more details, read our guide on how to choose the best graduate account. 

Finding a student bank account is about more than the free gifts they offer; compare them all to find one that will help keep you in the black!

Discover which university course offers the most value for money using our Degree Valuation Calculator: