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How to Budget as a Student in London

It’s no surprise that London is one the most expensive cities to live in. But if you’re considering studying in London, don’t let its reputation put you off. Millions of people live in London, and over 400,000 of those are students. If they can do it, so can you.

The key to living in London as a student is creating a budget. But it’s not the budgeting that's the hard part, it's sticking to it. With so much to do in London and so many quintessential university experiences to tick off, it's important to make sure you manage your money carefully to avoid a fortnight of eating 9p instant noodles. (However, that is a quintessential university experience too...)

If you’re starting a course in London soon, you’ve probably started thinking about your finances. Like everybody, you want to work out how to make your money go as far as possible. But if you’ve never lived in London, it can be tricky to work out a budget. We’ve put together a complete guide to creating a budget as a London student and some handy tips and tricks to finding affordable student accommodation and making your money go a little bit further.

How to calculate a budget as a student in London

Student Budgeting in London

Money can be tight for students in London but by budgeting well you can enjoy London fully.

For many students, going to university is the first opportunity for complete independence. It’s usually your first time away from home and your chance to manage your own lifestyle and finances.

It’s an exciting time, but it’s easy to make mistakes – especially with the excitement of a new course, new friends and a new city. Even if you’re returning to university for a Master's or PhD, the cost of living in London is constantly changing, so your old budget probably needs an update.

Admittedly, creating a budget is probably not your idea of fun, but it’s pretty vital that you make one.

The benefits of creating a budget beyond ensuring you pay all your bills and don’t go hungry include:

  • Less likely to end up in debt
  • More likely to build savings
  • Higher credit rating
  • Better chance of getting a loan or mortgage

But how do you calculate an accurate budget and what do you need to include? To create a budget, you’ll need to work out how much money you get each month and subtract your monthly expenses. Anything leftover is your disposable income for non-essential expenses (the fun stuff).

Calculating your income

Before you can do anything else, you need to work out how much money you’ve got coming in. You’ll need to include every penny you get from:

  • Student loans
  • Grants, bursaries, scholarships and sponsorships
  • Your parents and/or family
  • Your savings
  • Employment income

You may have other income alongside the list above, maybe you earn money from investments, regardless of what it is, include it in your income. Every penny counts. Once you’ve got your figure, divide it by twelve to work out your monthly income.

Calculating your outgoings

Now that you’ve got a figure for your income, you need to work out how much money you’ll be spending every month. When you’re putting together your expenses, try to avoid anything that’s not an absolute necessity. You need to include the following:

  • Tuition fees
  • Accommodation costs
  • Household bills
  • Travel costs
  • Food and drink

You’ll need to work out your monthly outgoings, but it’s not quite as simple as dividing it by twelve. You’ll need to look at when you need to pay for each expense. Let’s take a closer look at your outgoings.

Tuition fees

As you’re a student or planning to be a student in London, tuition fees should be top of your list of expenses. As we’ve already mentioned, unlike most other expenses, your tuition fees will be due roughly every four months rather than monthly.

If you’ve already been accepted on a course, you probably already know the cost of your tuition but if not, find out as soon as you can. The average price of tuition for UK students is around £9000 but can be two or three times higher for international students. Tuition fees are usually paid at the beginning of each university semester.

If you have a government student loan in the UK, your tuition fees will likely be paid directly to the university, so you don’t need to worry about them. But if you’re planning on paying your fees, you’ll need to make sure you’ve budgeted to make the payments on time. Most universities provide a detailed breakdown of each payment; often, there are two larger and one smaller payment. You’ll need to divide each by the number of months between payments to create a monthly budget.

For example, if your tuition fees are £9250 a year:

Payment 1 in September: £3500

Payment 2 in January: £3500
Payment 3 in May: £2250

The gap between payments one and two is four months, so you’ll need to divide £3500 by four to work out how much you need to set aside each month for tuition. It’s worth speaking to your university about payments as sometimes they will offer a monthly payment plan to make budgeting easier.

Student Accommodation

Private Student Studio Flats London

Private studio flats in London are an increasingly popular option for students of all ages due to their all-inclusive bills and privacy.

Beyond your tuition fees, student accommodation is likely to be your most significant expense. Accommodation costs in London vary pretty drastically depending on the type of accommodation and the location. When it comes to student accommodation in London, you have three main options:

University Halls of Residence

Most first-year students will be offered a room in a university hall of residence that’s usually relatively close to campus (but not always). The cost of university accommodation depends on the university, type of room and the area of London. The average cost of halls accommodation in London is around £180 a week, but if you’re creating a budget, you’ll need to look at the exact cost.

For example, if you’re going to study at UCL, here’s a breakdown of the costs for halls accommodation:

  • Twin (not en-suite) – £160.79 – £175.91
  • Single (not en-suite) – £192.43 – £240.59
  • Twin (not en-suite) – £99.33 – £138.11
  • Single (including en-suite) – £210.14 – £266.70
  • One-bed flat – £207.76 – £314.86

As you can see, the weekly costs vary quite a bit depending on your choice. It’s also worth noting that universities can’t guarantee the type of room you get, so you could end up paying for the most expensive room type.

Read our guide to student accommodation near UCL. 

Private Student Housing

Student Housing in London

Private student housing is a popular choice for second and third-year students who house share to cut the high rental costs.

Many students choose to look into private housing for accommodation. More often than not, this is as a house share with other students, and it’s rare for a student to rent a property on their own due to the cost. The average rental cost in London is around £1900 a month for a one bedroom flat, which is unaffordable for most individual students.

The cost of shared private housing varies, so you’ll need to research affordable areas. Often universities will have guidance available to help find private accommodation. If you’re creating a preliminary budget while searching, you should set aside around £1000 a month.

It’s worth mentioning that the quality of private housing in London varies dramatically. While many students have good experiences renting privately, there are a lot of risks involved – especially if it’s your first time in the city. Firstly, you’ll probably be living with and relying on people you don’t know to pay their share of the rent. Most landlords take a single rental payment a month, so if one person doesn’t pay, the others will need to make up the difference to avoid getting removed from the property.

But even if your housemates are reliable on rental payments, there’s no guarantee that you’ll get along with them. Studying at university comes with a lot of pressure, and it’s essential to have a space you can feel comfortable in to study and relax. In a shared house, you can easily be kept up at night by parties and loud housemates.

It’s also important to note that unlike most university halls of residence and private student accommodation, you’ll also be responsible for all household bills.

Private Student Accommodation

Student Accommodation Near Imperial College London

There's a huge choice of all-inclusive private student accommodation near universities throughout London.

Private student accommodation is an increasingly popular choice as it offers students an alternative to halls and private rentals. If you’re looking to get your head down and have a peaceful space to live and study, private student accommodation might be the choice for you.

On the whole, private student accommodation tends to be slightly more expensive than a hall of residence room and about the same as private housing. A private studio flat near Imperial College London in Hammersmith costs around £265 a week, which is slightly less than Imperial College halls and about the same as private housing.

Read our guide to student accommodation near Imperial College London. 

But where private student accommodation in London stands out is that you get an entire studio flat with an en-suite to yourself. Not only that but the standard of accommodation is much higher. Private student accommodation companies make sure that their properties have the best facilities and are well decorated – something that’s not guaranteed with halls or private housing.

Alongside that, all your household bills are usually included in the monthly payment.

Bills

Budgeting for London Bills

Household bills in London can be a high monthly expense for students.

Household bills will be one of your biggest expenses if you choose to live in private housing. Both university halls of residence and private student accommodation usually include bills in the rental cost which makes it far easier to budget – always check this is the case, though, so you don’t get caught by a nasty surprise.

If you live in a private house, you’ll need to incorporate the following into your budget:

  • Electricity - around £60 a month
  • Gas - around £60 a month
  • Water - £20-30 a month
  • Internet - around £35 a month
  • TV License (optional) - £159 a year
  • Phone bill - £20 - £50 a month

While we’ve given a rough outline above, the cost of your gas, electricity and water bill will depend on your usage. It also relies on how much energy and water your housemates use. So if your housemate is constantly running the tumble dryer, your bill will go up significantly.

Budgeting for your bills is difficult as your usage and tariff can change dramatically. It’s always wise to put more aside each month than you’ll need, to account for any increases.

One of the best ways to ensure your budget is accurate is to find accommodation where bills are included in the price. This gives you a set monthly figure to budget for and avoids any unexpected expenses.

Travel

London is a big city and has a lot of different transport options. It can be a bit overwhelming if it's your first time living in the city but don’t panic, you’ll get the hang of it in no time. The main modes of transport in London are the Tube (London Underground), buses and overground trains but there are also bikes available to use.

Public transport in London isn’t cheap, but it’s affordable if you plan trips and make the most of student discounts. One of the first things you should do when you arrive in London is to apply for a student Oyster card (travel card) as you’ll get 30% off all London public transport.

If you can, try to find accommodation close to your university so that you can save on travel costs. While you’ll still need to budget for getting around London, if you can walk to campus every day, you’ll save yourself a lot of money (and time) on travel.

Here’s a rundown of the costs for getting around London:

The Tube

London Underground Student Budgeting

The London Underground or "The Tube" is a great way for students to get around London on a budget.

If you live near your campus, you may only need to use the Tube occasionally and get single fares. Here’s how much it costs to get around London with single fares on an Oyster card:

London Zone Peak Time Off-Peak
Zone 1 £2.40 £2.40
Zones 1-2 £3.00 £3.00
Zones 1-3 £3.40 £2.80
Zones 1-4 £4.00 £2.90
Zones 1-5 £4.80 £3.20
Zones 1-6 £5.30 £3.30

As you can see, it’s much cheaper to travel in off-peak times. Daily travelcards are also available for £14.40 for students that are valid in zones 1-6. But if you’re going to be travelling around London a lot, it’s a good idea to look into weekly, monthly or yearly travel cards. Here are the costs for London travelcards with student discount applied:

London Zone 7-Day Pass Monthly Annual
Zones 1-2 £26.80 £103.00 £1072.00
Zones 1-3 £1.60 £121.40 £1264.00
Zones 1-4 £38.60 £148.30 £1544.00
Zones 1-5 £45.90 £176.30 £1836.00
Zones 1-6 £49.20 £189.00 £1968.00

London Buses

Student Budgeting London Buses

Using the iconic red London buses is a great way for students to save money getting around London.

If you’re looking for a more cost-effective way to get around London, the best way is to hop on an iconic red London bus. London buses are all cashless now, so you’ll need an Oyster card, contactless bank card or travel card to use them.

All London bus fares are £1.65, and if you only use buses, the maximum daily cost is £4.95. Plus, it's free if you transfer to a different bus within an hour of tapping in. If you have a student Oyster card, the maximum daily cost and fare will be discounted.

Getting around London on a bus takes a bit longer, but it’s a great way to soak in the city and see parts you may miss on the tube if you're not in a hurry.

London Bikes

If you’re looking for a way to get around London and avoid paying for a gym membership, bikes are available. The scheme is called Santander Cycle, and it costs £2 a day, providing your journeys are less than 30 minutes at a time. You’ll pay an additional £2 if you go over the 30-minute limit.

For most students, using London bikes is a fun way to get out and explore the city. But if you want to use them regularly, you can become an annual member for £90 and have unlimited use of the bikes.

Food, drink and entertainment

Entertainment in London on a budget

There's plenty for students to do for free in London including the Natural History Museum in Kensington (pictured).

Unsurprisingly, you will need to budget for food and drink. Food will take up a fair amount of your budget, but there are ways to eat well and keep costs down. On average, students will spend £50-300 a month on food. If you can, it’s always wise to set aside a little more for food than you expect to spend.

Here’s a breakdown of some average food and drinks prices in London:

  • Loaf of bread – £1
  • Milk - £0.91
  • Eggs x 12 – £1.92
  • White Rice – £0.98
  • Chicken (1kg) – £5.72
  • Apples (1kg) – £1.81

There are plenty of ways to save money on food at university but here are a few pointers:

  • Shop at local markets
  • Eat with friends and split the cost
  • Take a packed lunch to university
  • Stick to your shopping list (and avoid shopping when you’re hungry!)

If you’re going out for food or entertainment, try to find restaurants and venues that offer student discounts. Depending on your taste, going out in London can be pricey:

  • Pub meal – £8-12
  • Mid-range restaurant – £5-25
  • Cinema ticket – £10-15
  • Club entrance - £10-40
  • Concerts £15+

Find private student accommodation to suit your budget today

If you’ve got this far and you’re starting to worry about your budget for living as a student in London, don’t panic. There are thousands of students in London, and while it can be expensive, there are ways to make your budget work, such as:

  • Finding a part-time job (it’s good for work experience, too!)
  • Make the most of student discounts
  • Use the library or buy second-hand course books
  • Download a finance app to track spending.

One of the best ways to stick to a budget in London is to find all-inclusive student accommodation near your university. Being close to university means you won’t need to worry about daily travel expenses, and with all-inclusive accommodation, you won’t get any nasty bills in the post.

Find student accommodation to suit your budget today with Student.Studios2Let. We manage and rent private student accommodation in London near every major university. We do everything we can to make renting in London easy. We have a huge number of fully-furnished and all-inclusive studio apartments available. If you have any questions about our accommodation or finding affordable private student accommodation in London, please get in touch, and we’ll be happy to help.

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