We’ve all heard the statistics. Skyrocketing cost of higher education, rising cost of living and fewer jobs for students and graduates. In fact, a 2012 study found that approximately two-thirds of all students reported incomes below the poverty line.

As a student myself not too long ago, and having spoke to dozens of student users of our app, I understand the unique financial challenges of a modern student. And after having brainstormed a few ideas with the team here and accumulating tips from real-life students, I want to write about how a student can not only survive, but in fact thrive in university.

Let’s start with the basics of budgeting: why do you need a budget?

Why You Need a Budget

Maintaining a budget is one of the most fundamental practice in personal finance, yet few students I talked to have one. Why not? Well, here are a few common objections (see if you identify with some of them):

1. I know how much I make and spend. What is your bank balance right now? What is your largest daily expense? How much income do you make? And how much tax did you pay last year? It’s surprising how many students can answer these simple questions (adult included, actually). Most of us only have a general idea of our financial status, but without knowing the exact numbers, we can’t go about optimizing our finances.
2. Personal finance is simple: all you need to do is spend less than you earn. This is like saying if you want to live a healthy life, exercise more and eat less – it’s true, but it’s not very useful. The fact that you know it doesn’t mean you are doing it! The real question is, how do you spend less, and how do you earn more? And by how much?
3. It’s too difficult; I’m not comfortable with numbers. Personal budgeting should be easy and straightforward. If it confuses you, then you’re probably doing it wrong.
4. I don’t have any money to budget. Everyone has an income. even if you’re not working, you might be a recipient of a scholarship, government help or your parent’s allowance.
5. I’m too busy. A personal budget should take more than an hour to create and with the help of smart tools, should less than 15 minutes a week to maintain.
6. I don’t know how. You will after you finish this guide!

Creating a Budget That Sticks

The with budgets is that they rarely stick. People create them around the new year and stop following them by the next week. We did a survey once asking people why that is, and by far the most common reasons are that it either takes way too much time or it’s too difficult.

And who can blame them? Who wants to spend their weekends looking over a spreadsheet full of numbers, right?

That’s where an app like Pocetbook or Mint comes in. Use technology to automate most of the budgeting process. Pocketbook, for example, syncs with your bank accounts and automatically categorize 90% of your transactions (you can go in and categorize the rest manually). That way, you don’t have to manually enter all of them into a spreadsheet.

And instead of having to come up with arbitrary spending categories for your budget, an app will create a budget based on your past transactions.

All you need to do is determine what’s your income and set a “safely spend” limit – and let the app do the rest. The app will warn you when you’re close to overspending, at which time you can go in and look at where all your money went with the graphs that the app automatically generated.

Remember: A simple budget that sticks is better than a complicated one that doesn’t.

In addition, you should also take a few things into account:

1. Budget for emergencies. Apps can help you detect regular payments, but what they can’t do for you is identify irregular ones – for example, if your computer breaks down and you need to buy a new one. Budget for these by consistently saving a portion of your income into an emergency fund to you don’t have to dip into your savings.
2. Review and Revise. Budgeting is not something you do once a year (or even once a month) because you can’t plan for everything that will happen in that time. Instead, spend once a week and review your budget: has it gone according to plan and should you revise it? This means you shouldn’t worry when a budget doesn’t work out sometimes because it’s meant to be an iterative process.
3. Be realistic. Trust me, there’s almost no chance that you will curb yourself from any discretionary spending. We all need to do things we like, be it travel, buying electronics, or keeping up with the latest fashion. The key is not to cut these out but to budget for them.

And now that you’ve got the larger picture, let’s go down to the tactics.

Saving Money As a Student

Now that you know exactly how much you make and how much you spend, you can determine if you’re making enough money to cover your expenses. And if not, the easiest way to go into the green is to cut your expenses. Utilize the 80/20 rule here. Focus on the 20% of your largest expenses.

You can spend all day trying to save on electricity but that’s unlikely to make any difference to your bottom line.

According to our data, here are a few of the biggest expense categories.

1. Move to a cheaper place. University lodgings are cheap but they might not the cheapest option around. Getting a few friends to rent a place with you may get your dollars much better mileage. You can easily shave a few hundred dollars from your rent annually. And you know what? There’s no shame in living with your parents if you can.
2. Prepare your food. This is another big money saver, especially if you can get a few of your friends to dine together. You’ll be surprised how many of your friends will like this idea. And what if you don’t know how to cook? Keep your initial meals simple – like a salad or spaghetti.
3. Transport. Buy a bike. Need I say more? And you can stop paying for that gym membership too! And if you absolutely have to live far enough to require other form of transport, consider more than the obvious. For example, services such as RideJoy allows you to share rides with other people.
4. Textbooks. Use e-textbooks if you can, and if not, rent yours with Zookal or Chegg. And if these companies don’t carry your required textbook, buy second-hand. Never, ever, buy a new copy unless absolutely necessary.
5. Banking. As a student, you should be paying any banking fees, period. There are free everyday accounts, and if you have a credit card, get one without an annual fee and pay it off monthly. Pay off your credit card debt as soon as you can – Warren Buffett commented that even he can’t make money off 18% a month interest.
6. Entertainment & Other Expenses. Looks for student discounts at all time for these expenses. You can often find student discounts on your university’s website. Microsoft, for example, often run student deals for Office and Apple does the same with their range of products.

Increasing Your Income As a Student

The other side of the budgeting equation is increasing your income. And believe it or not, it can be done if you’re willing to put in the effort. The first thought students often have when it comes to increasing income is to work odd jobs – like deliver pizza, or working at a fast food joint.

That’s great if you’ve exhausted all other options. Here are a few other ideas we get from talking to students:

1. Max out on your entitlements. As a student, you are eligible for certain “incomes” that adults do not. For example, scholarships. Look beyond mainstream scholarships – some private companies also have them, albeit in much small amount (Pocketbook will be introducing ours soon). Certain universities also grant stipends to students who are doing unpaid internships.
2. Freelance. Don’t confine yourself to what is in your neighbourhood. It’s the 21st century! Technology has allowed to work remotely in my circumstances. You can find freelance gigs on websites such as Freelancer.com, for example. In fact, some of the best writers and graphic designers I’ve hired are overseas students and they will graduate with a portfolio related to their field of work.
3. Be an artist. If you can’t work for yourself, then you might want to produce your own stuff. Websites such as Etsy gives you a great platform to sell your handmade stuff (my wife creates leatherwork and sells them on the side) and TeeSpring allows you to sell your T-shirt design on their platform.
4. Do your own thing. Running a business isn’t as easy as you think but it can be done. I started my career in digital marketing doing my own thing while I was studying for my degree in accounting. What’s valuable about this is you’ll graduate with a set of skills you will not learn in a classroom. Plus, you might like your side business more than what you are studying – as in my case.
5. Tutor. Do you play the guitar? Perhaps you dance? Really good at math? Go out to your community and start getting clients. My math and physics tutor in high school were university students. Why did my parents go with university students? Because they know each other (ask your network) and they are cheaper.
6. Teach a community class. Platforms such General Assembly allows anyone to become an instructor and a teach a class, like this one Bosco did.
7. Teach online. Or, if like me, you’re not an introvert, you can teach online. Udemy, for example, allows anyone to create their own courses and sell them. For example, I know of a student who teaches mobile app development even though they are still in university – and they not studying computer science.

Of course, it’s easier to send out your resumes and apply for odd jobs. But remember, if it’s easy, then a lot more people will be competing with you.