Finance Guru

How to budget on a budget! Manage your time and money whilst getting out of student overdrafts and student loan deductions. Say goodbye to financial aid without saying goodbye to your lifestyle J

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Budgeting

Creating a budget can be simple and hassle free. As long as you know how much is going out and how much is coming in, you're free to continue the lifestyle you've become accustomed to (thanks to the SLC) whilst being able to clear your overdraft. Most student overdrafts are interest free for the first year after Graduation and are on average approximately £1500 give or take a few hundred. Below you can find a template of a budget sheet which I created (Clark, 1977)

Not only are you able to clear you're overdraft but you're able to monitor how much money you have free for an allowance. In addition, this budget shows the possibility of saving not only £100 a month in an interest savings account (ISA), but also for a Christmas fund. Please note that numbers in the budget sheet will vary depending on your personal circumstances.

An ISA is a tax free savings account. At the end of each tax year in April, your account receives tax free interest. You're able to open one of this type of account each year in total (ie not one per bank) Opening an ISA is easy and convenient. However if you're planning to transfer existing funds into an ISA make sure your bank does this by transfer rather than a withdrawal and deposit as you will lose money to the tax man!

 If you open an ISA in which you deposit a minimum of £20 each month, once you reach December you will have a minimum of £240 to spend. So not only will this enable you to be free from financial stress, it also stops you from overspending.

Keep track of your spending

Not sure where your money is going? You can monitor what you're spending and what you're spending it on using what I like to call 'My spending Sleuth'. Following on with an additional page in your budget sheet, use the template below to start managing. With a section on food and beverage (including trips to the pub and takeaways) and another for miscellaneous spending (clothes, cleaning products,, and my personal weakness shoes!) you'll know what your spending money on and where you can cut back.

Along the side I've had added a key. If you add letter into the cell with the number, the total cell won't add that cell to the total. I recommend either adding an additional row above or below to input your key code, or create a separate chart and add each amount continuously. I.e. in a similar way to the chart above just replace the week number with the key codes and the day of the week with the week number 1-4, input the amounts for every 4 weeks as per below..

Why is budgeting important?

Regardless of which industry you choose to work in, you will be faced with some form of financial work. It's important to know your way around spreadsheets, budgets, and logistics. Within the events industry you will have to calculate commissions, invoices, and work to a client’s budget. If you choose venue management, creating estimates and arranging packages and payments are also involved.

After Graduation

It's believed that in order to find a job that's financially secure you need to have achieved a 1st class degree or a 2:1. Whilst those with a 2:2 or a third will have to settle for 'comfortable' (Schick, 1982)

Liang discusses if in fact a 2:2 means a poor job with a low salary

Students: what will you do if you get a 2:2?

We're told we'll never get a job if we don't get good grades. But just how important is academic success when you hit the real world? 
Lu-Hai Liang, guardian.co.uk, Tuesday 17 April 2012 09.55 BST

Do visions of a Desmond haunt your dreams? Photograph: Nic Bothma/EPA

Did you hear about the girl who did a degree in ballet? She got a tutu. Rubbish jokes aside, many students are deeply troubled by the prospect of discovering, at the end of their final year, that they've been accorded a 2:2. And that's mostly because of reports that "around three-quarters of large graduate employers routinely use the 2:1 to sift [job] applications".

Two-thirds (66%) of the full-time students who graduated in 2010-11 would have sailed through that sifting process with their firsts and 2:1s. But 28% (the ones who ended up with a 2:2) would've ended up in the recycling bin, a further 6% graduated with thirds.

But here's the really startling thing. Of those who achieved a first in 2009-10, almost half (48%) were in full-time employment six months after graduating, according to statistics I obtained from the the Higher Education Statistics Agency (results for 2010/11 are published in June). What may surprise you is that the percentages for those with 2:1s and for those with 2:2s is almost exactly the same.

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Why give yourself those obstacles? What are you proving? If life is about eliminating as many future regrets as possible, then you need to make the most of your opportunities at university.

References

Clark, RB (1977) A Handbook for Use in the Preparation of Student Expense Budgets

Schick, GJ, Kunnecke, BF (1982) Do high grades, top schools, or an advanced degree lead to job security and extraordinary salaryprogression?, Interfaces, Vol. 11 issue 6, page 9