How to make your first loan instalment last

17 Aug 2020
By Jennifer H., Student at University of Portsmouth

Getting your first student loan payment can make you feel like a millionaire overnight and, chances are, you’ve never had this much disposable income before.

It’s very tempting to spend it all at once, but if you’re not careful, by week four you’ll be living off ramen and dust. I am by no means a money expert like my idol Martin Lewis, but between him and my own mistakes, I’ve picked up a trick or two.

What’s coming in?

Before I started university, I worked out how much money I’d have coming in each term and what I could spend each month. Your student loan will be paid in three instalments (you can check the amount and payment dates in your student finance account); one in September, one in January and one in April.

Checking this before you go to university prevents any nasty surprises when the loan arrives and gives you a chance to query any discrepancies before the academic year starts. No one likes being underpaid. This is also a good time to check if you’re entitled to any extra funding from your university.

What do you actually need to spend money on?

Now that you know how much money you’ll have available each month, work out what’s going out. Chances are, your biggest outgoing will be rent. If your student loan can cover it, I recommend paying your rent as soon as possible after your loan comes in. This will then leave you with your disposable income.

Next, think about what expenses you actually need and get rid of ones you don’t. For example, if you’re paying for a gym membership you never use, just cancel it. See, you’ve saved money already!

Expenses such as food are obviously important, so find out an average of what you’ll spend on food per week. My university recommends £35, but if you buy own-brand options or shop at cheaper supermarkets you could shop for less. If you shop with a meal plan and shopping list, instead of going in and picking things up at random, chances are you can reduce costs even more.

Other expenses that I’d consider important are travel (if you can’t walk to uni), any bills that aren’t included in your rent, course materials that you can’t get for free or from the library, and your phone contract.

What expenses can you really not give up?

But you should also include things that you genuinely feel you can’t give up. Personally, I can’t live without Spotify, Netflix or Amazon Prime, so I budget for them each month. To help me prioritise these expenses, I jotted them down with the monthly cost next to them and cut out anything I no longer needed.

On that note, the Which? student budget calculator is really good for listing important expenses and creating a budget sheet. Afterward, you can see how much money you have left for socialising, shopping and treats. After all, who doesn’t like the occasional take out coffee.

These are just a few ways I managed my first loan instalment. You will probably make mistakes, but that’s okay! After the first term, managing your money starts to become easier and, you never know, you may be able to start putting money into a savings account.

My parting advice to you is this: take advantage of student discounts and other exclusive opportunities that are available to you. There are a lot of ways you can save money as a student.

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I’m a first-year English literature student at the University of Portsmouth. at University of Portsmouth