Your first year of university comes with many challenges. For myself and many others, personal finance is a key priority, especially given more discussion about the cost-of-living crisis. Being able to manage your personal finances correctly is a skill you can develop in university, and that will aid you for the rest of your life.

In this article, we’ll go over some of the considerations and advice on how you can effectively manage your own budget to help you lessen your financial stress.

Understanding your expenses

In order to figure out how you will budget your money in university, you should figure out your income sources, and then categorizing your expenses into fixed and variable costs.

Sources of income: Some students choose to work part-time while completing their studies, while others prefer to focus solely on their studies. Sources of income can include any allowances given by your family, financial aid, student loans, and savings generated prior to entering university. Once you’ve figured out your sources of income, you’ll need to weigh them against your fixed and variable costs.

Fixed costs: Costs that will usually stay the same every month. This includes expenses like tuition, phone plans, rent or residence fees, and meal plans. Since these costs are predictable, you can factor them in as the foundation to your budget.

Variable costs: Costs that will vary from time to time depending on needs and wants. This includes groceries, going out to eat, textbooks, entertainment, and transportation. These costs can be less predictable, where you may need to adjust your spending habits from time to time.

Creating a plan

Once you have determined your fixed and variable costs, you should create a plan for how you will budget your money.

Financial goals: In order for your budget to meet your needs, you need to figure out what long-term goals you have. This may include having little to no student loan debt after graduating or saving towards a big purchase like a car. Setting aside money and investing it is the best way to achieve your goals.

Tracking expenses: The first step to a good budget is figuring out where your money is going. For myself, using a simple budget template on a spreadsheet has been a helpful tool for tracking expenses. You could also consider using one of the many apps that can also track your spending habits. 

Building your budget: Consider your income, allowance, and current savings to determine how you will structure your personal budget. One of the most popular templates for this structure is the 50-30-20 method: 50 per cent of your budgeted money will go to necessities, 30 per cent will go to your wants, and 20 per cent will go towards your financial goals. It’s important to note that this may not work for everyone, but that sticking to a plan of financial discipline will be crucial.

Making the most of your money

There are many opportunities for students that can help them make the most of their money. This includes taking advantage of discounts and making investment decisions.

Student discounts: There are many stores and services that provide exclusive discounts for students. Always make sure to ask or to look online as to whether a store may provide student discounts, and be prepared to show your student ID when making purchases. You could also consider taking advantage of student discount programs offered by banks and online services.

Investing your money: You should consider investing the savings you have put aside rather than letting it sit in a chequing account. Investing your funds can be as simple as placing it in high-interest savings or a guaranteed investment certificate (GIC). Low-risk investing like a GIC offers you a return on your fixed investment. If you are feeling more advantageous, you can also take on more risky investments by considering mutual funds or stocks. When making investments, you should consider speaking to a financial advisor beforehand.

Rewards programs: Banks usually offer a variety of rewards programs to students and account holders for using credit cards on their purchases. By using a credit card for your purchases, you can get cash back, points towards other purchases, or other benefits. Using a credit card can also help build your credit history, provided you use it responsibly. If you don’t pay off your credit card bills in time, you can be on the hook for high-interest payments. Therefore, ensuring financial discipline by sticking to your budget plan is the best approach.

Using the resources available

As a student at the UW, there are also many resources and services provided to you that can help in balancing your budget. 

Public transportation: If you are a full-time student, the GRT’s U-Pass is included in your tuition. It allows students to use the ION and GRT bus system for free with their WatCard. This can allow students without a car to travel around the Kitchener-Waterloo region without having to pay fares or the cost of a rideshare service.

Student services: Many student services are included in your tuition, offering them free to use or at a reduced cost. This includes career and academic advisors, access to libraries, access to PAC and CIF gyms, and various other programs. Before paying extra for some services externally, consider whether they may be offered by the university.

Campus events: Campus communities often hold a range of free events, providing social opportunities without needing to spend money for a fun experience. Additionally, some events even offer free food for students.

The university also provides information to new and incoming students on managing your finances, through support on financial aid and paying for university. This includes an online budget calculator tool that can be used to estimate the costs you may have during your first year.

Finally, a key challenge to budgeting can be impulse purchases. When making purchases, always take a moment to consider if it’s necessary and if it fits within your budget. Instead of dining out every night, consider planning ahead with groceries or using your meal plan (if applicable). Rather than ordering that rideshare to get across the city, consider hopping on a GRT bus to get to your next destination. While these examples may seem like low-stakes costs that don’t harm your budget, they add up as unnecessary expenses. Identifying the value of necessities versus wants is important. Spending on wants can be okay to do on occasion, but can derail your budget if done without considering your financial plans and goals.

Budgeting your money as a first-year student can be daunting, especially as many experience financial independence for the first time. This is a time of firsts for the personal finances of many students, whether it be getting your first credit card, living on your own for the first time, or getting your first pay cheque from a co-op job. As long as you try to stick to a budget and practice self-discipline when it comes to your personal finances, you will likely be successful in budgeting your first year.