Making a Budget

A budget plan shows you what's happening to your money and will allow you to see:

• exactly how much you have available to spend each week or month
• what your essential outgoings are, and how much money you have left over for any non-essential items.

The following step-by-step guide will help you to set up a budget plan that works for you. We have also provided a budget planner and a daily tracker at the end of this guide to start you off.

Step one: Work out your income
Find out how much money you have coming in. Draw up a personal budget plan to work out your income. Only list money that you are certain you will receive. Remember that student income arrives in a variety of ways, student loans and grants come termly and earnings from part-time work may come weekly or monthly. You will therefore need to do some calculations to work out what your income is on a weekly basis.

Step two: Work out your expenditure
It is important that you know how much you will be spending on priority items from the start. Work out your essentials/priorities such as rent, food, bills (gas, electric, water, phone) and travel costs in the first instance. Use your personal budget plan to work out your annual, monthly and weekly expenditure.

Step three: The balance
Subtract your expenditure from your income to find out just how much money you have left over. Do you have extra money or a deficit? If you have a surplus, it is worth keeping aside at least some of that money for emergencies before you start buying any non-essentials. If you find that you have a deficit, you need to consider ways of either reducing your expenditure or increasing your income.

Step four: Keeping track of your finances
It is advisable to test your budget from time to time to make sure you are keeping to it, and also to ensure the budget plan you have put together is a realistic one for you.

A good way to see if you have budgeted correctly is to keep an actual record of your expenditure for a week to see how it matches with your budget. You can do this by using a daily tracker . Remember to include all the items you buy even if it's just a coffee or a magazine as they all add up. If you find that you have a shortfall you will need to look again at your income and expenditure to see how you can adjust things to make sure you keep to your budget.

Your money mantras
For those who are strapped for cash:

• Do I need it?
• Can I afford it?
• Have I checked if it is cheaper elsewhere?

For those who are not strapped for cash:

• Will I use it?
• Is it worth it?
• Have I checked if it is cheaper elsewhere?

If the answer to any of the questions above is no, then don't buy it! Access our budget planner to calculate your annual, monthly or weekly income and expenditure.