Like late-night study sessions and cramming into a student kitchen to cook up meals, being savvy with money has long been part of the university experience. But with the cost of living remaining high, students are more money-conscious than ever. He says soaring prices for essentials, such as food and energy bills, have “disproportionately affected” students, while maintenance loans (intended to help cover day-to-day costs) have failed to keep up with high rates of inflation.
STS’s 2025 money survey found the average student spends £1,142 a month on living costs, but receives a maintenance loan of £640, meaning the £502 shortfall has more than doubled since 2020. So what are the best ways to stretch your loan as far as it will go? Opening a student bank account comes with plenty of perks, from free railcards and large interest-free overdrafts to a welcome cash incentive that may come in handy during freshers’ week festivities.
But to stay on top of your spending, don’t keep all of your money in one place. Robert Medhurst, 25, who graduated this summer from Nottingham Trent University, recommends opening a separate digital bank account alongside your main student account, to split your maintenance loan into daily budgets. Budgeting features on apps such as Monzo, helped him to visualise his finances and rein in his spending, which he found much harder to track when all of his maintenance loan was lumped into one account.
Setting aside money and placing a spending cap on the pots feature – one for rent and others for weekly food shops and nights out – “really allows you to see how much you’re spending and not go over”, he says. It can also help curb the urge for contactless spending. It’s common for students to find themselves tipping into their overdraft faster than expected.
To avoid the burden of being in the red, start setting out your budget before you step foot on campus. Allingham suggests incoming students use time over the summer to work out “where the gaps will be in your budget – where potentially you might need to cut back, or where you might need to look for extra income”. There are plenty of free tools available to help, such as online budget trackers.
Soham Chougale, education officer at University College Birmingham Guild of Students, created Your Friendly Guild Budget Buddy to help students keep their finances afloat amid the cost of living crisis. It includes features that help map out income and set saving goals, while offering information on where to access financial and mental health support in one place. If you’re experiencing financial difficulty while studying, applying for non-repayable hardship funds and bursaries offered by your university may help ease the strain.
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