The 3 Key Budgeting Techniques that Will Save you Money Each Month

Let us help you keep your finances looking healthy this year, with three key budgeting approaches, which will save you money every month!

We also have some top tips from final year student Olivia Kiernan and budgeting advice from our Wesleyan Financial Consultant, Rich Harrison.

Budgeting Approaches

There’s a variety of useful ways you can save money, whilst keeping track of where your disposable income is being allocated to. We look at three valuable approaches to budgeting, which include:

Split Accounts

Consider opening three separate bank accounts or pots within your current account - one for bills, one for savings, and one for general expenditure. This means you can allocate your bill money and savings after you’ve been paid each month, and know what you have left to spend on general expenditure without overspending. If you’re self-employed, Money Savings Expert says you should consider opening a separate account just for taxes, so that you can siphon off part of your income each month, effectively saving for your annual (or bi-annual) tax bill?


According to BBC Watchdog you can go a step further and open even more accounts for different types of expenditure, such as ‘Christmas’, ‘Holidays’, ‘Entertainment’ etc. This is called ‘Piggybanking’, and the idea is to have standing orders set up that go from your main account where you receive your income, to each of these separate little accounts each month. These accounts are the ‘piggies’ and you feed them each month through the standing orders after you have been paid!

Zero-based Budgeting

Another common budgeting method is the ‘zero-based budgeting’ (ZBB) approach. Popular book ‘Budgeting for Dummies’ says that with ZBB, ‘each activity starts from a budget base of zero’. The idea is that at each budget cycle (each month or week), you start from scratch at zero, and are forced to allocate all income to a category. Whether this be savings, general expenditure, emergency fund, bills, miscellaneous etc, everything must be allocated until there isn’t a penny spare. This method obviously requires discipline but is a very good way to remain conscious of where all your money goes.

You can budget by breaking down your expenditure into essential and non-essential expenditure. Let’s take a closer look at this approach:

  • Start by calculating your total income, by adding up the income from your job, any savings that you plan to put aside each month, any loans, grants or sponsorship you receive or any benefits, and any money that you receive from parents or other family.
  • Next, calculate your outgoings. You can look back on statements on your online banking to get an idea of what you currently spend, or some banking apps filter this for you so you know how much roughly goes on food, entertainment, clothes etc. Your essential outgoings will likely include any professional fees such as insurance, uniform and equipment, debt repayment, household and personal bills, travel costs, and food shopping.
  • Lastly, subtracting your essential expenses from your total income will show you what you have left to spend on ‘nonessential’ expenses like gym memberships, socialising with friends, hobbies, tickets, hair and beauty appointments and treat food.
  • Once you’ve established your available budget for essential and nonessential expenditure you can start to break it down into more manageable parts, like a weekly food shopping budget or a monthly socialising budget. Help yourself to stay on track by making a shopping list before you go shopping and sticking to it, or by drawing out the cash before you go on a night out and leaving your bank cards at home- so you don’t get carried away and overspend once you’re out and enjoying yourself.


Do you know what your monthly outgoings are? How much do you spend per month on non-essentials, like that cup of coffee at the station each day?  All the time you have debt you need to try and continue spending like a student – frugally. Even if you don’t have any debt, it’s still important to set a budget and not waste your hard-earned money.

  • Make sure that your total income is either more than or equal to your total outgoing expenses, on a weekly or monthly basis. If you’re spending more than you’re earning consider ways to either increase your income, such as by working additional hours, or reducing your expenses.
  • Be sure to keep monitoring your budget in case your outgoings increase, for instance if one of your household bills goes up or you start a new hobby.
  • Have an emergency fund on hand to cover unpleasant surprises that may arise such as unexpected repair bills.

Budgeting is important as a student too, not just once you’ve graduated and started work. Olivia Kiernan, Final Year Dental student and Treasurer of the SUDSS society at Sheffield Dental School shares her top 5 budgeting tips:

- Set yourself a realistic weekly budget and try and stick to it!

- Have something fun to save up for, whether it’s something big (e.g. Elective) or something smaller (e.g. Annual Ball).

- Purchase text books second hand, or rent them for free from the library.

- Always ask for student discount in both restaurants and shops. And sign up to UNiDAYS.

- Browse different student bank accounts, some offer freebies for example a rail card.

Rich Harrison, Financial Advisor at Wesleyan Financial Services, shares the following budgeting tips with us:

- Check if your bank offers an ‘alert service’. An alert service allows you to set various alerts which help you keep on top of your spending. For example, if your bank balance falls below a certain amount you can receive a text message alerting you.

- Your bank may also offer an app which helps you to track and manage your spending habits, by breaking down your weekly or monthly expenditure into a graph or pie chart. This allows you to see how much you spend every month on each category, for instance on groceries or entertainment.

- Don’t shy away from checking your bank balance and statements on a daily basis.

- Lastly, if you’re facing financial difficulty, don’t stick your head in the sand. Speak to a financial professional or a trusted family member to seek help and support.

Whilst you have plenty of time to save money for those important stages of your life and career, making a positive start and getting into healthy financial routines will be a great platform for you to build on, so that you can achieve your personal goals in the long-term!

This article does not constitute financial advice.